Banks must contribute to Youth Fund

Innocent Katsande
For long we have focused and pursued CABS, CBZ and IDBZ scrutinising them on how they were doing it all wrong and what they should have done better in terms of loan disbursement to fund youth-owned business. Well we have been wrong, we have forgotten, youths empowerment and youths development is supposed to be the effort of every player in our local economy. In order to grow our economy through supporting projects being spearheaded by young people, banks that have long been silent must begin now to contribute to the Youth Development Fund.

The Kurera/Ukondla Youth Fund under CABS has committed US$10 million as an example of what banks can and need to do. Barclays Bank, Standard Chartered, NMB, MBCA, BancABC, Ecobank and others need to also commit to an amount they can be proud of for having contributed to nation building through supporting projects run by young people.

The success of the Youth Fund has so far in the public eye been judged based on the amounts being approved by banks and the time taken to process a particular proposal. Attention and emphasis of complaints wherever I go is largely being placed on the assumptions that the money is not enough, collateral and guarantor requirements are not youth friendly and that to accesses the fund you need to be politically affiliated somehow.

Well of all the analysis and conversations taking place on the ground in youth circles about what the Youth Fund should accomplish and how it should be done, the crux of the matter is that none of the supposed benchmarks and yardsticks being used to measure the success of the Fund are accurate.

The Youth Fund is a revolving fund which means the ultimate base by which the Fund’s success and impact can be measured is solely on the amounts being paid back on each project that was funded at the end of the day.

The success of the Fund rests on young people’s growth in business from strength to strength, their capacity to returning the money and allowing others to access the same Fund. We can no longer continue to only focus on scrutinising the processes taken when one applies through the Ministry of Youth, ZYC, CABS or CBZ. Youth have been empowered and it’s a journey, yes we have not yet arrived but the facts and figures on the ground indicate that young people have been given the money and projects have been funded.

At CABS alone out of the US$10 million negotiated by Government through the indigenisation programme, close to six million have so far been channelled to youth owned projects. If young people were being productive with the six million seed sown by Government into the sector, how much should we be worth by now in terms of projects being run by young people with a common goal of contributing to our economy?.

Globally we are in a cash crunch, there isn’t enough cash floating around and even more challenging is our local situation which is why every bank needs to come on board. In light of the current economic downturn, Government has made provisions in the form of favourable policies to ensure that even in cash less economy such as ours young people are not left exposed.

As much as we continue to engage banks and Government to keep the environment conducive for young people to grow their business, it is also imperative that youths, as the recipients, are well organised, schooled and prepaid for whatever endeavour they need to get into.

As youths, we cannot continue to expect banks to pass a blind eye on our lack of seriousness and organisation. We need more than ever to be acquainted with the requirements of industry. For any investment you are likely going to receive anywhere, there are requirements and as a standard for the currently existing fund under the CABS Kurera/Ukondla Youth Fund the requirements for the application process are as follows:

Applicants will download forms on the websites of Ministry of Youth, CABS or Zimbabwe Youth Council and complete them with the assistance of youth officers where necessary and forms are submitted to CABS for further processing.

Once the loan application forms are received, they go through a desk assessment where the assessors will check whether all fields which require the applicant’s attention have been completed and all the required attachments supplied. Once the process is done, the application will then be enlisted for site visit.

The site visit is the second process of assessment where officers form CABS, Ministry of Youths and ZYC will visit the applicant at the actual place of operation for interviews. The major issues which will be discussed during the interview include profitability of the business and income generation, legality of the business (permits, licences etc), capacity to repay the loan, human resources aspects and evaluation of the market availability for your product. After this process, the assessor will write a detailed site visit report with recommendations to the Credit Committee which will form the basis for approval or further recommendations. When approved the credit committee will deliberate on the site visit report and then come up with an amount as agreed by the whole committee. The committee consists of only officials from the bank’s credit department. Once approved, the bank will produce an offer letter stating the amount granted and terms and conditions of the loan. The applicant will be notified of the approved facility and then the offer letter is delivered to the applicant’s nearest CABS branch where he/she will visit the branch for signing.

Once the applicant appends his/her signature on the offer letter accepting the conditions of the loan which includes not more than three months grace period, 10 percent interest per annum and repayment period of not more than 24 months, the bank will start processing disbursements.

The disbursements are done using the attached quotations whereby the funds quoted will be transferred directly into the supplier’s account and the applicant is issued with the proof of payment for use when collecting the materials/equipment paid for. After collecting the required implements of the project, the applicant is expected to begin work on the project.