Youth fail to utilise loans given to them

Youth, Indigenisation and Economic Empowerment Deputy Minister Mathias Tongofa has said most of the youth who were given money to start projects have nothing top show for it as they have not started an projects at all.

 Speaking in parliament Tongofa said this is a headache to the Ministry because we are looking for ways of recovering the loans advanced to the youths.

 "The youths who were given these loans have nothing to show that they were given monies. We visited provinces such as Mashonaland East and some of these youths indicated that they opened up some projects that they are operating but some did not start even a small project," he said. "We now have problems in recovering these loans. Some youths were given $1 000 and some were given $500. The cost of recovering the money will be more than the money advanced. Therefore, our strategy in the coming phase is the beneficiaries of such loans should be youths who have knowledge in the management of business. When they bring a project proposal, it should be a viable project."

He said also, they  have realised that in the past, the youths who obtained these loans all wanted to go into poultry farming but when the birds have reached the selling stage, they have no market.

"The birds are either eaten at home or are given out as credit to bad debtors. As a result, they fail to pay back the loans. As a Ministry, we are now proposing that these loans be given to a group. It will be easy to follow up because we will not be following up individuals. We have realised that tracking a loan for an individual is more expensive," Tongofa said.

"The other step we will take is that we will be working hand-in-hand with traditional leaders, Members of Parliament or any organisations within that area who would have worked with the youths and help them look for viable project proposals. We have realised that in the past, when some youths were given loans, some would go for leisure activities such as beer drinking and some even buy cars or pay lobola."

He said monies were coming from CABS and each province was given $10 million.

"The loans that were given out are $4.5 million and the only amount recovered was $1.5 million. We had meetings with CABS so that we can re-launch this project. We are now in the process of working on the modus operandi for this project to be a success. We will also be requesting guarantors who will be able to guarantee the loans advanced to these youths," Tongofa said. "The guarantors should be assured of the fact that should the youths fail to re-pay, properties will be attached from the guarantors. Therefore, we are saying guarantors should be told that this is what it involves. If you guarantee somebody, when they default, you will be held responsible for repayment of those loans."

He said when we launched this programme, we thought that it would be a revolving fund and when they pay back, monies will be advanced to other youths who want to go into projects.

"The youths should know that this is a loan and not a grant. Banks are working on the recovery of these loans and we are working together with the banks so that we tell them that we want those monies. Banks will go to the youths and the youths will say the money belongs to the Ministry and the Ministry will tell them that the money belongs to the banks. Hence, we are saying let us put our heads together and work as one," he said. "The youths should be told that these loans are a revolving fund. After you have benefited, your colleagues should also benefit. We have started on a new programme in order to help the youths. Let me emphasise and say youths need to be assisted and we should have a consistent supply of cash instead of having an ad hoc programme."

Tongofa said they have a lot of youths who are coming from colleges, universities and Vocational Training Centres.

"They graduate into the streets and as a result, they need to have projects which are in concurrence with what they studied. We therefore need to put up a fund which is going to be used in funding youth projects. At the moment, we do not have a permanent fund but we depend on getting the funds from the banks that are facing financial difficulties," he said.

"We have a programme called LEAF, which is an economic empowerment facility and is going to assist the youths in financing. When we have been advanced these loans by the banks, we will give you the modus operandi of the coming fund. We also have an ILO programme which is going to assist."

Tongofa said the programme they have is TREE, which is Training for Rural Economic Empowerment.

"We looked at this project and said it is a very good programme. The Minister of Finance and Economic Development has promised us that he is going to assist with the funds so that we take over what has been done by the ILO," he said.