The Sunday Mail
Africa Moyo
GOVERNMENT has tightened the purse strings on a fund that was designed to help youths establish business ventures after over 60 percent of the beneficiaries failed to repay, creating an inconvenient logjam in the administration of the fund, especially for those still willing to access the facility.
The US$11 million fund, which was availed through the Kurera/ Ukondla Youth Development Fund, was deliberately tailored to empower youths, particularly in the wake of the indigenisation and empowerment policy.
An estimated US$5,6 million of the fund – run under the Ministry of Youth, Indigenisation and Economic Empowerment and administered by Cabs, CBZ and the IDBZ, has been disbursed so far.
The maximum an individual could borrow was pegged at US$5 000, but there has been exceptions, with reports that some youths pocketed as much as $300 000 under unclear circumstances.
But analysts say the development is not peculiar to youths alone given that non-performing loans in the country as at December 31, 2013 stood at 15,92 percent, way above the 5 percent international benchmark, signalling the worrying extent of loan defaults within the economy.
Last week, the director of Indigensation in the Ministry of Youth, Indigenisation and Economic Empowerment, Mr Godfrey Sigobodhla confirmed that some youths decided to abscond after squandering proceeds from the fund.
He, however, noted that nearly 500 000 projects have been approved thus far, with a further 1 000 expected to be approved soon.
“Up to April this year, we have disbursed US$5,6 million but the repayments have been poor. Non-performing loans have been in excess of 60 percent,” said Mr Sigobodhla.
Interestingly, only Harare Province has exhausted its allocation. In other provinces such as Mashonaland Central, only districts like Bindura, Mt Darwin and Mazowe have exhausted their quota, while Mashonaland East, Goromonzi and Marondera have also used up their respective portions.
In Mashonaland West, Zvimba, Makonde and Karoi have drawn up their allocations while in the Midlands and Masvingo provinces, only Gweru and Masvingo districts have received their dues.
In Manicaland, Nyanga, Makoni and Chipinge have exhausted their budgets.
Mr Sigobodhla said there was need for monitoring and evaluation of projects.
“In some genuine cases, some projects failed (to perform well). Secondly, some youths have diverted the loans to some projects that have nothing to do with the initial project they applied for. Thirdly, some youths never wanted to engage in projects and absconded (after getting money), they went to the Diaspora and the other issue is that some projects were successful but the youths just don’t want to repay. It’s a culture among many people not to meet their obligations . . .
“They think it (loan) will end just like that and no one will ask them to pay back. If you go to them asking for the money, they always say let’s come up with a new repayment plan.
“So the issue of monitoring and evaluation is critical. But now it is a challenge for us because Government has no money and we can’t follow up on the youths to see how they are performing,” explained Mr Sigobodhla.
Government, he said, has always exercised due diligence, choosing projects that not only had the potential to be viable, but also create employment for others as well.
Last week, the permanent secretary in the Ministry of Youth, Indigenisation and Economic Empowerment Mr George Magosvongwe admitted during the joint launch of the Youth and Tourism Enhancement Project and the Governance Institutional Strengthening Project that youths abuse funds they get for projects and hinted it was time to review the funding system.
