Zanu PF deputy Youth League secretary Lewis Matutu has taken a swipe at the Empowerment bank’s conditions when applying loans saying they are restrictive and out of reach for many Zimbabwean youths.
Matutu took to his microblogging site, Twitter, and bemoaned the conditions set up by the Empowerment bank which is meant to aid the youths who intend to start up new income generating projects.
Matutu posted: “Empower Bank is an empowerment tool for young people but the people running the bank are of a different opinion, stringent conditions on borrowing and centralization of the bank is not good for the youths.”
In an interview with the Mail and Telegraph Matutu said the conditions to access loans are out of reach for many youths.
“They are requesting for collateral or guarantor charging 5% interest payable after 3months were stringent conditions not set to make sure bank recovers its money,” Matutu said
He said the bank is in Harare and Bulawayo hence the need to decentralize it so that youths in other arias can benefit.
“The bank must be decentralized as soon as possible to allow young people in rural and remote areas to also benefit 2. Interest rate must be reduced to 2% 3. Young people without collateral or guarantor must have their projects monitored until full payment of the bank loan
“It is in Harare and Bulawayo but is it fair to youths in rural areas who have never been to Harare or Bulawayo.”
Investigations by this publication show that stringent loan applications are meant to safeguard the bank funds given that Zanu PF youths have in the past defaulted and failed to repay youth fund loans.
However, Matutu said the bank can use other methods to make sure that they recover their funds.
“The bank needs to monitor youths’ projects in order to recover their loans.
The youths want the bank to be decentralised, they also want the interest rates to be reduced,” he said.
“There is no need to give young people cash instead of procuring equipment and other things needed for their projects.”
Between 2014 and 2017 banks failed to recover about $10 million from the youths that accessed loans for empowerment projects.