20th November 2025
Sello Motseta
The Local Enterprise Authority (LEA), along with the Ministry of Trade and Entrepreneurship is leading a nationwide stakeholder consultation process to gazette an updated and legally binding definition for Small, Micro, and Medium Enterprises (SMMEs).
The initiative aims to align Botswana’s SMME sector with current economic realities with objectives to develop a legally binding SMME definition that will ensure compliance with the Small Business Act (2004) and the Industrial Development Act (2019).
The exercise is designed to promote consistency in data collection, measurement, and reporting for the sector; enhance policy formulation, planning and targeted support for SMMEs; improve access to finance and reduce inefficiencies in service delivery for the advancement of the SMME sector.
The Authority gathered the first stakeholder consultation and engagement workshop at Gambling Authority offices in Fairgrounds, to build a consensus driven definition using parameters prescribed by the Small Business Act (2004) as a reference point. The regulatory framework in the Act, developed a definition based on the number of employees and annual turnover.
The stakeholders included key SMME ecosystem players: Bank of Botswana, funding institutions and commercial banks as well as key Government organs that consume and report using data from SMME activities like Statistics Botswana, BIPDA, BNPC, CIPA, academic institutions as well as representatives from the Ministries of Trade and Entrepreneurship and the Ministry of Finance.
Laying the foundation and setting the tone for the discussions was the Head Information and Knowledge Management at LEA, Ms. Dynah Solani.
Dynah Solani, Head of Information and Knowledge Management at LEA, said “Some ecosystem players have developed their own definitions which uses 1 of the 2 attributes namely turnover and employees and rarely use them collectively. LEA started its operations in 2007 and used the definition contained in the 1999 SMME Policy to enroll clients for LEA services and products.”
She said, “Consistency across the SMME development ecosystem will support measurement, data collection and reporting for the sector( such as contribution to the economy and access to finance for the sector).”
Some ecosystem players lack of awareness about the replacement of the 1999 SMME Policy with the National Entrepreneurship Policy of 2019. The use of the 1999 SMME Policy definition is supported by SI. 79 of 2011 Gazette order which is still active but old( 14 years old).
LEA upgraded the criteria for characterization of SMME’s following the release of the National Entrepreneurship Policy of 2019 to align with the definition in the new policy. The 2019 NEP definition has never been Gazetted to comply with the Small Business Act.
The challenge with definitions contained in policies is that they are not legally binding and enforceable such as the SMME definition in the 2019 NEP Policy. The lack of awareness of the existence of the National Entrepreneurship Policy of 2019 also presents a challenge. A situation compounded by the fact that there is no universally agreed definition of an SMME.
Solani pointed out that since the Act was passed, the absence of a gazetted definition has led to various government departments, private sector entities, and commercial banks using different criteria to define SMME’s in their service offering and transactions with the sector.
“Our definition is turnover based. Any business that has an annual turnover below P50m is classified under SMME,” said Patrick Maruping, Head of SMME – Business Banking at ABSA.
This has created a fragmented ecosystem, making it difficult to coordinate support programs, collect accurate data, and analyze the sectors true contribution to the national economy.
Solani went on to present a proposed SMME definition that leaves the number of employees unchanged with adjustments made on turnover (less than six employees for micros, less than 25 employees for small enterprises and less than 100 employees for medium sized enterprises).
The proposed guidelines by LEA envision for the revision of annual turnover parameters as follows: increase micros from less than P200, 000.00 to less than P300, 000.00, increase that of small enterprises from between P200 000 and P5M to between P300,000.00 and P7M. Recommendation for medium enterprises proposed to move the range from P5,000,001 and P15M to between P7,000, 001 and P20M.
Stakeholders expressed broad support for updating the SMME definition. There were however varied in their understanding of key issues, with some stakeholders recommending benchmarking with various multilateral platforms such as SADC, United Nations, European Union, World Bank and other global organs to help reach a more informed understanding of challenges associated with exercise.
Other stakeholders called for the development of a definition that accomodated sectoral differences and considered impact on definition caused by increased use of technology to replace labour.
“LEA has a database of SMME’s. They should look at database to evaluate transition over the years. We should not confine ourselves to employees and turnover,” said Bonno Bogatsu, workshop participant who works as a BNPC Consultant.
She said, “The definition should help us accommodate sectors which are not well known like Arts.”
