News / National
'Govt employees loan facility a Ponzi scheme'
26 Aug 2021 at 06:37hrs | Views
TEACHERS have expressed concern over the delay by the government to disburse loans from a revolving fund for a civil servants' facility known as Government Employees Mutual Savings (GEMS) fund.
The government launched the scheme last year with the aim to create a revolving fund from which civil servants, who volunteer to participate can access loans at concessionary rates.
But Zimbabwe Teachers Association (Zimta) acting national secretary Goodwill Taderera yesterday referred to the fund as a Ponzi scheme that was bound to fail.
"The issue of GEMS is a thorny issue to us and it does not come as a surprise that many of us up until now have not received any loans that they applied for," Taderera said.
"We foretold this. In 2020, the total number of civil servants was 330 000. If the monthly deduction is 0,025 or 2,5% per employee, at the first time of issuing loans, after three months the government would raise $459 million.
"If you divide $459 million by 330 000 employees, each civil servant would get about $1 693 and what is that? I think this is another Ponzi scheme."
He said the government should just give teachers enough money to meet their daily needs.
"This is bound to end in failure and other civil servants would not benefit from the scheme even if they apply for it. The government should just give teachers enough money to sustain their daily needs,'' he said.
Public Service Commission secretary Jonathan Wutawunashe said the disbursement of loans to applicants was in progress.
"Due to the enthusiastic response, disbursements are being managed to ensure that a significant number of applicants receive their loans every month," Wutawunashe said.
"Applicants, who are members of GEMS yet to receive loan amounts, should, therefore, not despair as the savings scheme, which is based on a combination of monthly contributions and monthly repayments by those who have already drawn loans, is designed to ensure that all contributing members benefit."
He indicated that the government has recently injected "significant amounts" as a bridging measure to allow the member-financed fund time to grow to independently support the demands of members.
The government launched the scheme last year with the aim to create a revolving fund from which civil servants, who volunteer to participate can access loans at concessionary rates.
But Zimbabwe Teachers Association (Zimta) acting national secretary Goodwill Taderera yesterday referred to the fund as a Ponzi scheme that was bound to fail.
"The issue of GEMS is a thorny issue to us and it does not come as a surprise that many of us up until now have not received any loans that they applied for," Taderera said.
"We foretold this. In 2020, the total number of civil servants was 330 000. If the monthly deduction is 0,025 or 2,5% per employee, at the first time of issuing loans, after three months the government would raise $459 million.
"If you divide $459 million by 330 000 employees, each civil servant would get about $1 693 and what is that? I think this is another Ponzi scheme."
He said the government should just give teachers enough money to meet their daily needs.
"This is bound to end in failure and other civil servants would not benefit from the scheme even if they apply for it. The government should just give teachers enough money to sustain their daily needs,'' he said.
Public Service Commission secretary Jonathan Wutawunashe said the disbursement of loans to applicants was in progress.
"Due to the enthusiastic response, disbursements are being managed to ensure that a significant number of applicants receive their loans every month," Wutawunashe said.
"Applicants, who are members of GEMS yet to receive loan amounts, should, therefore, not despair as the savings scheme, which is based on a combination of monthly contributions and monthly repayments by those who have already drawn loans, is designed to ensure that all contributing members benefit."
He indicated that the government has recently injected "significant amounts" as a bridging measure to allow the member-financed fund time to grow to independently support the demands of members.
Source - newsday
