Repay indigenisation loans – Nhema

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By Zimbabwe Investor on October 21, 2013. No Comments

Government is concerned by the default rate on loan repayments particularly by beneficiaries of the Youth Empowerment Fund, a Cabinet minister has said.

Indigenisation and Empowerment Minister Francis Nhema

Minister of Youth, Indigenisation and Economic Empowerment Mr Francis Nhema made the remarks at a two-day indigenisation and empowerment conference organised by Zanu-PF Harare province last week.

Minister Nhema pointed out that of the 4 000 people and organisations who had accessed loans, only 30 percent have repaid.

“Empowerment requires discipline among us and, as such, we should play by the rules of business.

“Of the 4 000 people that accessed loans that range from US$1 000 to US$25 000, only 30 percent have managed to repay the money.

“I’m talking about business ethics, the mindset. When you borrow, you must take back.

“We should show sincerity by paying back loans in order to allow others who wish to benefit from the same initiative to get funding,” said Minister Nhema.

The loans are being funded by various financial institutions, which include CABS, Old Mutual, CBZ and the Infrastructural Development Bank of Zimbabwe (IDBZ).

Under the youth fund, prospective applicants were required to come up with viable projects backed by a business plan.

Projects that were considered under the loan facility were in manufacturing, agriculture, engineering, tourism, mining and retail.

Latest statistics indicate that CABS had approved a total US$2,9 million worth of youth empowerment projects under the Old Mutual Kurera-Ukondla Youth Fund.

The US$10 million Old Mutual Fund was launched as part of the group’s indigenisation plan. Another US$1 million was committed for youth business skills training.

A total 1 952 projects were approved from a total 13 201 applications between January 2012 and January 11, 2013.

Of the US$2,9 million, just over US$1,9 million had been disbursed. The average loan size is US$1 500.

Minister Nhema also emphasised that the implementation of the indigenisation programme is guided by the Indigenisation and Economic Empowerment Act that was passed by Parliament in 2007.

The Zanu-PF-led Government has pledged to fulfil promises contained in its manifesto for the July 31 harmonised elections that it won with a convincing majority.

The manifesto identified indigenisation and economic empowerment as the catalyst to turn the fortunes of the economy around by involving the majority of Zimbabweans in mainstream economic activity.