Mthabisi Tshuma, Business Correspondent
STATE-owned Empower Bank is targeting to roll out loans worth $100 million across the country this year in addition to the $20 million that has been disbursed so far.
The bank, which was launched by Government in 2018 is meant to support various youth initiatives with potential to set up viable businesses.
Speaking on behalf of the acting chief executive officer, Mr Shadreck Mhembere after a recent visit to the Bulawayo branch by the Parliamentary Portfolio Committee on Youth, Sport, Art and Recreation and the Thematic Committee on Indigenisation and Empowerment, the bank’s head of retail and credit, Patience Chakuvinga, said over 2 000 youths have benefitted from the $20,5 million loan fund that has been disbursed earlier.
“The bank targets to grow its loan book to $100 million and to have agents in all districts of the country by year end. A total of $20,5 million loans have so far been disbursed to 2 409 beneficiaries,” she said.
“Retail and credit outreach teams have covered all the 10 provinces of the country with over 48 000 people reached with financial literacy training.
“We have also introduced value chain lending arrangements for example, in agriculture in order to improve performance,” she said.
Chakuvinga said the financial institution was aiming at empowering a large number of youths.
“The bank strategy has been to build capacity to reach and serve its target market. Now that this has been somewhat achieved the focus is now on growing the loan book and number of empowered youths.
“This will be achieved through cooperation with agent bankers, youth groups, value chain players, tertiary institutions and community leaders,” said Chakuvinga.
She added that the bank was facing challenges where beneficiaries of the loans are failing to repay due to the Covid-19 pandemic, which has had a devastating effect on the earnings of many of the beneficiaries.
“The Covid-19 induced lockdown has increased the risk of loan default. Loan arrears have, as expected, worsened in April and May 2020. Agency banking rollout has been negatively affected by Covid-19.
“The bank requires additional capital to meet business growth requirements and the new minimum capital requirement for microfinance banks now set at US$5 million by 31 December 2020,” she said. — @mthabisi_mthire.