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Oliver Kazunga Senior Business Reporter
OLD Mutual has disbursed $4.8 million under the Ukondla/Kurera Youth Fund, with a total of $139,080 having been received by beneficiaries in Matabeleland.Ukondla/Kurera Youth Fund is a facility administered by CABS that was launched as a result of an agreement between government and Old Mutual. Under the arrangement, CABS is expected to advance loans to the tune of $10 million based on the security of the 2,5 percent youth fund shares received from Old Mutual through the Indigenisation and Economic Empowerment programme.

Responding to questions from Business Chronicle, Old Mutual group marketing executive Lillian Mbayiwa indicated that $5, 1 million was approved as at June 13, 2014 declining from $5.5 million approved as at December 31, 2013.

“There are 11 youths groups that have benefited so far from the funding. The reason for the decline in approvals from year end 2013 to June 13, 2014 is due to an exercise that we carried out to decline all offers that were not taken up by the intended beneficiaries.

“Some loan applications had been approved pending the receipt of certain documentation. If that documentation was not submitted within a stipulated time, the applications were then declined,” she said.

Matabeleland beneficiaries were in cattle fattening and fishing projects in Tsholostho and Binga respectively.

Two fishing groups in Binga namely Bacikula and Tutambule have each received $24,540 while $90,000 has been disbursed to a cattle fattening project in Tsholotsho.

Other groups that have benefited from  the Ukondla/Kurera Youth Fund were from Zvimba, Chipinge, Nyanga, Chivhu, Headlands, Chimanimani and Mutasa in projects such as horticulture, potato farming, poultry and bee-keeping.

The average loan size for the groups as of June 13, 2014 was $1,438 while as at December 31, 2013 the average loan size was pegged at $1,383.

“The money allocated to each group is calculated based on the needs of the group as established by the assessor on the day of the site inspection. Prior to funding, a youth fund assessor visits the group members at their project location and interviews them.

“The purpose of this visit is to establish, among other issues, the viability of the project and the needs of the participants.  The total amount required by the project is then split equally between the participants,” she said.

Mbayiwa said the loan repayment amount takes into account the interest rate of 10 percent per annum, establishment fee two percent on the borrowed amount, the tenure of the facility and the grace period.

“Financial benefits will increase after paying off the loans. Nonetheless, these benefits can still be realised during the term of the loans. The projects are funded based on viability and the ability to repay.

“The success of the projects and the financial rewards there from now depend on the commitment of the individual group members.”
Under the facility, interest on the borrowed amount accrues during the grace period.

Mbayiwa said the monitoring and evaluation of these projects by Old Mutual was an ongoing exercise adding project mismanagement, misappropriation of funds and disputes amongst group members are the main challenges faced by the groups.