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Low-interest loans for all Government employees

by Staff reporter
27 Feb 2020 at 05:56hrs | Views
All Government employees will be able to access low-interest loans from a fund set up with Government seed money and salary deductions from all civil service and defence forces staff.

In addition, members of the Defence Forces will have shops within their cantonments where they will access subsidised basic goods while civilian staff will be able to access similar goods through improved Silo shops.

In a briefing after yesterday's Cabinet meeting, Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa said Government has approved the establishment of the Civil Service Mutual Savings Fund and injected $100 million as seed capital.

This will be augmented by a deduction of 2,5 percent from the total pay of every State employee. But employees can opt out of the scheme.

A major benefit will allow civil servants and members of the defence forces to access loans from the fund at an interest rate of between 2 percent and 7 percent, far lower than the 12 to 30 percent charged by commercial lenders.

Minister Mutsvangwa said after looking at proposals from Finance and Economic Development Minister Professor Mthuli Ncube, Cabinet resolved that the Government Employees Mutual Savings Fund (GEMS Fund) be established with effect from next month.

Government will immediately provide a lump sum injection of $100 million from the budget to facilitate the expedited establishment of the Fund.

A steering committee comprising the Public Service Commission, Ministry of Finance and Economic Development and the Office of the President and Cabinet will be established to decide on the implementation modalities of the fund.

Turning to the establishment of garrison shops, Minister Mutsvangwa said the shops will be established to enable all members of the defence forces in the GEMS Fund to have the additional benefit of accessing subsidised basic goods sold in the specialised shops located within cantonment areas.

Prof Ncube said the establishment of the garrison shops was a norm the world over. Civil servants were not being left out, he said, as they will benefit from Silo shops. He admitted that there were some glitches in setting up these shops, but Government was working to rectify that.

Prof Ncube said the establishment of the GEMS Fund was aimed at protecting civil servants from extortionate loans from loan sharks.

"We realised that some of our Government workers are heavily indebted to loan sharks," he said. "We want to solve the problem of borrowing from loan sharks and since it's a mutual facility people can opt out."

Minister Mutsvangwa also briefed journalists on the proposed Zimbabwe Investment Guide, adding that Cabinet considered and approved it as presented by Prof Ncube.

The Guide is a facilitative tool to the implementation of the new National Investment Policy in the wake of the promulgation of the Zimbabwe Investment and Development Agency Act.

"It outlines, inter-alia, the country's investment opportunities, the tax system and investment incentives. Government will periodically review the Investment Guide to ensure that investors remain current with regard to Zimbabwe's investment requirements and incentives," she said.

Source - chronicle

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