The Sunday News
THE country is facing challenges on the economic front, but we are pleased to note that Government has continued to look at avenues to better the lives of Zimbabweans.
In its endeavour to uplift the lives of ordinary people in the country, the Ministry of Youth, Indigenisation and Economic Empowerment last week launched a new empowerment scheme, a $10 million Localised Empowerment Acceleration Facility (Leaf), meant to fund youths, women and disabled people’s enterprises through partnership between the Government and the financial services sector.
The new fund comes after the Government launched the revolving Youth Development and Employment Creation Fund almost four years ago, which however, failed because of low re-payment rate by beneficiaries.
It is therefore important that measures are put in place to make sure that the new scheme does not suffer a similar fate. Beneficiaries should be equipped with skills so that they embark on successful business ventures.
It will also be prudent that a team is set up to monitor time and again progress being made by beneficiaries in their ventures, so that the money does not go down the drain, and the loans are paid back so that other people can benefit as well.
In the previous facility, over 70 percent of loans disbursed were not repaid. There were concerns from stakeholders that there seemed to be a growing culture of treating loans like manna from heaven. “Apply for the loan, get the money, eat, be merry and thank God for his blessings, appears to be the modus operandi under which most people are operating. While the argument that money is expensive hence the growing number of non-performing loans holds water, there can be no denying that there are some among the country’s populace who just cannot fathom the idea of repaying a loan,” argued a writer with our sister paper, Sunday Mail.
The Reserve Bank of Zimbabwe also disclosed that the percentage of non-performing loans was ballooning with each passing day. The then acting RBZ governor, Dr Charity Dhliwayo, noted that most of the borrowing taking place was for consumptive purposes.
“It is also notable that under-capitalised banks are saddled with high levels of non-performing loans. In addition, the ever-greening of non-performing loans has resulted in the understatement of the level of provisions for bad and doubtful debts, thereby overstating the respective institutions’ earnings and capital positions. In addition, we have also noted the continued abuse of loans and advances by related parties (particularly directors and shareholders) which has resulted in huge levels of non-performing insider loans.”
Nonetheless, we believe those tasked with running the scheme have learnt from the past and beneficiaries alike would not treat the loans as manna from heaven. We are pleased to note that Youth and Empowerment Minister Cde Patrick Zhuwao has already made it public that there will be tight screening of prospective beneficiaries of the new scheme, and that lessons have been learnt from the past, and thus loopholes that led to non-performing loans would be attended to.
At the launch, Vice-President Phelekezela Mphoko said the facility would enhance broad based economic empowerment through participation of local communities, adding that it was also a response to the 10-Point Plan enunciated by President Mugabe in his recent State of the Nation Address.
“Leaf will also effectively engage and begin to provide some remedy to the challenging unemployment levels in the country. It will enable enterprising young people, women and disabled persons within our local communities to start their own businesses, and in doing so create employment opportunities from the very grass roots within our society.”
Once again, we commend Government for the initiative, and call upon would be beneficiaries to be ethical in their operations so that efforts of the country’s leadership do no come to naught.
