Senior Business Reporter
THE Government plans to set up a microfinance institution to assist youths with funding for their various economic empowerment projects, a Cabinet Minister has said.
Responding to questions in Parliament on Wednesday last week, the Minister of Youth, Indigenisation and Economic Empowerment, Patrick Zhuwao, said plans to establish the microfinance institution were at an advanced stage.
He said provision of funding to youths was critical taking into account that the 42 vocational centres in the country were also imparting entrepreneurial skills to enable youths to be included.
“Those 42 vocational training centres also provide entrepreneurial skills. The objective of providing vocational, technical and entrepreneurial skills is to enable the young people to be able to be financially included. As a ministry, we have received from Treasury during 2016 an amount of $2,5 million,” said the minister.
“We are utilising that amount towards establishment of a youth focused micro-finance institution. Processes of establishing that particular micro-finance institution are at an advanced stage.”
Minister Zhuwao said through the Indigenisation and Economic Empowerment legislation, the Reserve Bank of Zimbabwe has put in place measures for all financial institutions to provide at least five percent of their loan book towards empowering young people.
In the 2017 national budget, Finance and Economic Development Minister Patrick Chinamasa made a provision for establishment of a youth bank.
In 2015, the Government said it had tightened screws on a new $10 million loan facility for youth start-up projects after high defaults registered in an initial facility of similar nature to the youths.
In recent years, the youth fund was embroiled in controversy amid concerns that the facility was abused, with beneficiaries failing to honour their debts.