Arrest Youth Fund defaulters: Zhuwao

HARARE - Indigenisation minister Patrick Zhuwao has called upon government to arrest youths, largely from Zanu PF, who looted the National Youth Fund and never returned a dime.

With the economy in constant decline thousands of youths are desperate to have access to new loans but will not get anything until defaulters return at least
$3,2 million dollars to enable the revolving fund to be operational.

Old Mutual which launched the programme in 2011 has thus locked $5,1 million — which is part of the revolving fund — in a bid not to lose more money.

According to Old Mutual, some of the defaulters have “disappeared” while others have “skipped the country”, making it a mammoth task to recover the loans.

Speaking at the National Economic Empowerment Conference in Harare on Thursday, Zhuwao said defaulters should be dragged to court.

Zhuwao gave defaulters an ultimatum up to the end of 2015 before “the law takes its course”.

However, it will be interesting to see which way the tide will turn as government is also liable to pay back the loans as they acted as guarantors for some individuals who benefited from the scheme.

“We have been asking people who took loans to return them. If you borrowed, we are saying with the little days left until end of 2015 make it your prerogative to go to the bank and work out a payment plan. Your holding on to that loan means that others cannot get.

“I am giving Old Mutual the blessing to take defaulters to court,” he said.

Contrary to widespread belief that 97 percent of the loans were not returned, Old Mutual said $1,7 million of the $4,9 million disbursed had been paid back.

“I want to thank Old Mutual for the 1,7 million (being re-disbursed) but I would also like to urge them to add the remaining $5,1 million,” Zhuwao said.

The amount will be re-disbursed to the districts from which the repayments were made.

“I am happy that Old Mutual have said it themselves that $1,7 million was returned. Detractors were saying 97 percent of loans were none performing. These are all lies,” he said.

“The problem is detractors scared away Old Mutual and Old Mutual said let’s stop giving out the youth fund. It is all meant to destabilise us and close the door on youths that are supposed to benefit.”

Old Mutual Zimbabwe Group marketing executive Lillian Mbayiwa said a total of $4 926 358 has been disbursed since 2011 and the money has been channelled towards over 3 000 projects,”

Mbayiwa said although Old Mutual understands that every project was prone to turbulent times, it was disheartening that some defaulters were not at least coming forward with a “written notice” to make payment plans.

“It is no secret that the fund has experienced high levels of non-performing loans,” she said.

“Efforts have been made to collect the payments and some of the challenges faced are that some of the beneficiaries have relocated and others have moved from the districts and provinces that they were operating from while others have left the country altogether.”

Mbayiwa said in other cases some projects had failed completely for reasons that include the diversion of funds from the projects and the lack of commitment to running the projects.

“In light of the challenges faced by beneficiaries in servicing their loans, the Youth Fund has suspended all charges on loan accounts,” she said.

“These charges included interest and late payment penalty charges. As a result, whatever deposit, however small, will result in a net reduction of the beneficiary’s loan amount.”

Old Mutual said Zimbabwe’s youths who make up over 70 percent of the country’s population will not be able to access the recently launched the Local Empowerment Acceleration Facility (Leaf) before paying off the KureraUkondla loan with CABS.

“We therefore urge recipients to repay the loans to allow other projects in their districts to benefit from the fund,” Mbayiwa said.

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