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A COMPREHENSIVE audit of the Youth Fund is in the process following some discrepancies exposed in the allotment of some loans, the Minister of Youth, Indigenisation and Economic Empowerment, Cde Chris Mushohwe has revealed.
Cde Mushohwe said this during his Manicaland visit in Mutare on his countrywide familiarisation tour of his new Ministerial portfolio last Friday.
The minister said that the Central African Building Society was the only bank that recorded a 97 percent repayment failure while the other four banks that were administering the fund recorded 100 percent repayment failures.
Given the high rate of non-performing loans, Cde Mushohwe said all the banks that were administering the fund have declined to unlock the balances until outstanding amounts were repaid.
“There was 97 percent repayment failure of loans from CABS. At CBZ and the other three banks there was 100 percent repayment failure. Because of this, all the banks have discontinued the facility (Youth Fund) until a repayment plan has been brought forward.
“We want this revolving fund to work, so all beneficiaries please return the money. Engage the Ministry if you are having problems in your projects. Your commitment to repay is what we want so that the banks reopen the facility again,” said Cde Mushohwe.
Under the Youth Fund programme, each province received a revolving fund of $1 million which was meant to fund bankable projects.
Cde Mushohwe, however, underscored that due diligence on the disbursement of loans was not observed by both the banks and responsible Ministry officials.
He added that a reconciliation of all the financial statements must also be done to clear any possibility of ghost beneficiaries.
Until then, Cde Mushohwe called on all the banks that administered the fund to stop adding penalty charges to the 10 percent interest rates on the loans.
“If proper needs assessment and due diligence is observed in the Youth Fund we can avoid the present high repayment failure. Bankability of projects and market research to determine viability of some of the projects was overlooked.
“We want to reconcile all the disbursements and see if beneficiaries were entitled. We have also uncovered that in some cases some of the beneficiaries were not youths (35-years and below), while some names submitted by banks are non-existent in some provinces.
“All these discrepancies must be accounted for through a comprehensive audit. Province by province we are doing the reconciliation exercise so that we can resume the programme on a fresh start,” said Cde Mushohwe.
He, however, hinted on starting a new model of disbursing the Youth Fund citing that consortiums had more impact on the ground.
“Instead of giving one beneficiary $500 or $1 000, a group loan, for instance of $250 000 can be given to invest in large-scale operations with socio-economic impact on the ground.
“Since this is a revolving fund more various youth groups can benefit in the next circle on and on. There are a lot of potential value addition projects in Manicaland that can be invested in which create socio-economic impact on the ground and downstream employment opportunities for other youths rather than just investing $500 in poultry project or micro projects of such kind,” he said.
Cde Mushohwe also called on vocational training centres to teach more on value addition in entrepreneurship courses.
He added that the purpose of the Youth Fund was to groom youths to become entrepreneurs and future business tycoons, thereby depicting the visionary upshot intended by the indigenisation and empowerment drive.
Minister Mushohwe said President Mugabe was passionate about youth empowerment. According to reports from the Ministry last year, Manicaland topped the list of funds disbursed, having gobbled $857 733.
Zanu-PF Manicaland youth league secretary for Indigenisation and Economic Empowerment, Cde Washington Zihwihwi, during the question and answer segment at Mutare Vocational Training Centre requested the Minister to consider a case by case inventory of the fund.
Online Reporter