Auxilia Katongomara, Business Reporter
WOMEN and Youth Affairs Minister Sithembiso Nyoni has defended the establishment of Empower Bank saying the institution will afford youths an opportunity to access loans without stringent requirements.
Minister Nyoni said Treasury had already availed $12 million which is available as soon as the bank opens its doors soon.
Responding to questions in the National Assembly, Minister Nyoni said youths had been marginalised and thus the need to establish a bank dedicated to their needs.
“The reason why you are having this facility is that young people have been marginalised by traditional banks. They have stringent rules and stringent regulations that really impede young people from accessing loans.
“There are procedures; the collateral that they ask for is really beyond the reach of a lot of young people. What we are trying to do here is to create an institution that will groom young people.
“They will have different products apart from just lending that will facilitate the young people to be able to be bankable,” she said.
Minister Nyoni said the creation of Empower Bank was consistent with the National Youth Policy that advocates for the setting up of a youth friendly financial institution that caters for the needs of the youth for project support.
“Empower Bank is a bank that is going to accommodate the peculiarities associated with the youth, the majority of whom do not have collateral security or historical financial records that would prove the usually required good track record,” she said.
The Minister noted that significant strides had been made towards the establishment and capitalisation of Empower Bank.
“The Empower Bank project is now in its second phase, namely; the upgrading of the credit only microfinance institution into a deposit-taking microfinance bank that will operate under the name of Empower Bank Limited.
“The application for the registration of Empower Bank Limited is currently under consideration by the Reserve Bank of Zimbabwe as the Government released a further $10 million on the 28th of November 2017 under the 2017 National Budget to capitalise the project.”
Minister Nyoni said the latest payment takes the capitalisation of Empower Bank to $12.5m which amount enables the licensing authority, the Registrar of Microfinance Institutions (MFIs), to register the project as a deposit taking microfinance institution if all the licensing requirements are met.
She said the money has already been made available by Treasury.
The bank is also on course to securing suitable premises to accommodate both the headquarters and the Harare branch as a starting point before full scale decentralisation once the registration process is complete.
Minister Nyoni said the board of Empower Bank was composed of eight directors that have been approved by the Reserve Bank.