Individual youth loans frozen…New model to reduce default rate
Patrick Chitumba Midlands Bureau Chief
THE government has stopped issuing out loans to individual youths but syndicates because of the high loan default rate which stood at 97 percent. This was said by the former Minister of Youth, Indigenisation and Economic Empowerment, Cde Chris Mushohwe while relaunching National Youth Service at Dadaya Training Centre in Zvishavane on Thursday.
Cde Mushohwe, sworn in as the new Minister of Information, Media and Broadcasting Services yesterday, said the government was working on coming up with a new loan model aimed at reducing the default rate. He said it was unfortunate that while the fund was meant to empower the country’s youth and facilitate the fruition of the government’s empowerment and indigenisation policy, 97 percent of beneficiaries had failed to pay back the loans.
He said a subsidiary of Old Mutual, CABS and CBZ each disbursed $10 million to the youths. “It’s sad to note that 97 percent of the fund wasn’t paid back by beneficiaries. That’s what the banks told me and from now, we’re no longer giving the loans to individuals.
“Youths must form groups, syndicates before they’re considered for such development loans,” he said. Cde Mushohwe, said Bulawayo youths got $1 million. He said if Bulawayo youths had thought of coming together and directed the money towards the revival of Merlin Ltd, the benefits would have been there for people to see.
He said emphasis should be on big projects aimed at taking over the country’s economy. The minister said not all of the $10 million youth fund was exhausted as some of provinces like Matabeleland North and Matabeleland South partially used their $1 million allocations while others like Harare exhausted theirs.
The youth fund targeted youths between the ages of 18 and 35 years.