adminIn separate interviews at Stanbic Bank offices in the city centre on Friday, the youths said they were not able to access the $20 million loan facility given to them by the Ministry of Youth Development, Indigenisation and Empowerment.
The revolving $20 million facility is meant to support youth projects and small and medium enterprises (SMEs) around the country.
Youths between 25 and 35 years, who run businesses, are expected to benefit from the fund.
The objective of the fund is to stimulate youth entrepreneurship and promote national development.
The bank will be giving a minimum amount of $5 000 while the maximum will be $20 000 at an interest rate of 14 percent per annum.
However, the youth who spoke to Chronicle appealed to the ministry to relax the conditions for them to be able to access the loans.
The conditions include producing collateral in the form of title deeds and an evaluation of the property used as collateral.
The bank also prefers youths who are already in business and requires documents of recent business transactions such as invoices, receipts and orders from the applicants.
Mr Charles Nyathi from Magwegwe said while the youths appreciated that the ministry of youth was trying to empower them, it was important to note that they did not have some of the requirements that are being demanded by the bank.
“We are being told that we are supposed to produce collateral in the form of immoveable properties, which are supposed to be evaluated by housing agents,” said Mr Nyathi.
“The problem now is that most of us do not have those houses. Although they accept a house owned by a guarantor, it is not easy to raise the $200 or $250 charged by the housing agents to evaluate the houses. At the end of the day, one is expected to raise about $600 for the evaluation of the property, the project proposals and other expenses which include transport.”
Mr Nyathi said the conditions would only promote the wrong people, who are not targeted by the ministry.
“I foresee these funds being channelled to people who are not targeted by the ministry because most youths cannot raise the money that is required to process the necessary documents.
“I would like to appeal to the Ministry of Youth and Stanbic Bank to at least relax the conditions for us to be able to access the funds,” said Mr Nyathi.
Another applicant, Ms Thandolwenkosi Mthethwa, said the bank was being unfair to the applicants, as some of them had nothing to produce as collateral.
“The issue of collateral is a setback for some of us because we do not have the title deeds.
“I have prepared the project proposals, but I am stuck now because I do not have the house and the money to pay the evaluator. I also do not have records of business transactions because I am trying to start a new business,” said Ms Mthethwa.
An official from the Ministry of Youth in Bulawayo said it was unfortunate that the youths were not happy with the conditions, but urged them to try and work around them.
“The issue of collateral goes with the money that someone is applying for. For a $20 000 loan, it is obvious that the bank would require collateral, but for smaller amounts it might not be necessary,” he said.
“Those who cannot meet the requirements can still go for smaller amounts and start on a smaller scale, because there is nothing we can really do about it.”
He said the youths in Bulawayo were now ignoring smaller loans and going for huge amounts of money yet they could not meet the requirements.
“When the CABS loan facility was launched, most youths applied for the funds and ignored the CBZ loans because CABS was offering $5 000 while CBZ offered $2 000.
“What the youths do not know is that they are allowed to be repeat borrowers at the CBZ bank if they feel they need more money. The conditions would also be relaxed when one is applying for the second time,” said the official.
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