HARARE - Most youths will not benefit from government’s Youth Development Fund (YDF) as they do not meet the loan criteria, financial institutions said.
The Infrastructure Development Bank of Zimbabwe (IDBZ) and Central African Building Society (Cabs) — the institutions tasked with disbursing the fund — said the youths must improve on their proposals.
“Most of you (youths) are failing to meet stated stipulations to access the funds,” David Ganyani, a Cabs loans officer, told youths at a consultative meeting in the capital last week.
He said most of the youths’ project proposals are “mere copy and paste”.
“In rare cases (some of you) genuinely qualify for the loans but then the few that qualify are dishonest and fail to repay the loans. So in the end banks are scared of availing the funds to you as it is not profitable,” said Ganyani.
This comes as Zimbabwe’s unofficial unemployment rate is estimated at above 70 percent, with youths comprising more than half of the figure.
Tichaona Kaseke, a senior loans officer at IDBZ, added that it was not viable for banks to lend to the youths as they “misuse capital and choke profits before they mature”.
“When we give them money they… buy things like cars instead of re-investing the money into their projects resulting in the money disappearing,” he said.
The YDF was launched in October 2006 as a revolving fund, targeted at empowering youths. Disbursements commenced the same year.
The loans are disbursed at interest rates ranging between eight and 10 percent per annum.
Ganyani said Cabs had so far approved 3 622 loan applications worth $5,2 million, but 72 percent of the loans are non-performing.
The average loan application at Cabs was around $1 438, according to Ganyani, and most of the projects funded were in the agriculture sector.
On the other hand, IDBZ has to date disbursed $450 750 since 2009.
CBZ Bank has loaned average amounts of $2 000 at 10 percent interest per annum and has disbursed a total $2 682 777 from 2009.
IDBZ figures indicate that about $197 000 has been recovered from the $451 000 disbursed.
The bank issued loans of between $1 000 and $5 000 per project.
The fund has been marred by distribution irregularities, with youths in Matabeleland North reported to have received one percent of the total disbursements while those in Harare got 47 percent, among others.