via Over 70pct of youth fund loans not repaid | The Source March 20, 2014
Over 70 percent of loans disbursed under the youth fund in the past four years have not been repaid, prejudicing the government of millions of dollars, Parliament heard on Thursday.
The Central African Building Society (CABZ) managing director, Kevin Terry told the Parliamentary portfolio committee on Youth, Indigenisation and Economic Empowerment that so far the society had approved 3,622 applications worth $5,2 million and had disbursed $4,5 million.
The average loan size was $1,438.
“Of the $4,4 million that we have disbursed, the arrears currently stand at $2,3 million with a total of non-performing balances of just over $3.1 million,” he said.
“Statistics of the non-performing loans disbursed are just under 72 percent.”
The chairperson of the committee, Justice Mayor Wadyajena, demanded detailed information on disbursements before asking Terry to bring more information.
Earlier, the Infrastructure Development Bank of Zimbabwe (IDBZ) chief executive, Charles Chikaura who appeared before the same committee, also complained about non-performing youth loans.
“At this stage these loans are non performing. There is still a chance to recover the money from the projects if the economic environment improves,” he said.
“But if all fails we will have to litigate. That will be the normal procedure but we stand guided on that matter by the government.”
The loans were being disbursed under the Youth Development Fund launched by government in 2006 as a revolving fund.
The projects managed by IDBZ were classified under the Integrated Skills Outreach Programme (ISOP), General Fund and Meikles Fund which were funded to the tune of $500 000 after re-launch in 2009.
The Meikles fund accounted for $200 000 of which half was yet to be disbursed.
Chikaura said initially the fund performed “extremely well” but later the projects started struggling partly due to poor economic performance.
He said there was need to restructure the facility to take into account the difficult operating environment.
For the ISOP fund, $223,000 was disbursed and only $150, 000 was repaid and for the General Fund $125,000 was disbursed and $7,391 was repaid. Under the Meikles fund, $102,000 was disbursed and $40 000 had been repaid.
COMMENTS
The average loan amount is quite low. An amount that a gainfully employed individual in a fully functioning economy could raise by themself through saving and avoid the bondage that a loan imposes. And if the loans have been disbursed in the usual patronage system, some recipients, I’m sure, view it as payment for the murder and mayhem they have performed in the name of ZANU and do not see any good reason to pay it back.
The issue of economic stability which is largely based on the stability of our politician’s minds plays a big part. The projects that were awarded loans could have become unviable after disbursement rendering the loan bad. Such undertakings to fund projects work well with a little of more truth from the rulers about the true state of the economy.
My understanding is when a loan is to be given out certain requirements need to be met handiti e.g your credit record , affordability any security to safe guard that loan incase u won’t pay back. The banks which were giving out these loans did thy look @the risks they were taking. In my conclusion they were trying to make zanu happy stop complaining & reporting the mess if u can’t beat them join them
These loans were mostly given to zanu pf youths. Security for the loan was a Zanu pf card. Several applications from youths perceived as MDC T were turned down by officials of the then Kasukuwere ministry of youths. So let the banks litigate so that these Zanu pf youths and officials from the ministry will learn the hard way. MDC T youths-you are safe
‘We cannot repay becozz of suunnctioneze put by Tony Blair toileteey’. Mr Terry, you were not seriously expecting these deviant ‘youth’ to honestly come and pay up were you? So on they go to the next juicy ‘fund’ to gobble up.