Govt negotiating with Old Mutual to unlock $5,1m under Youth Fund

old-mutualHARARE – The Ministry of Youth, Indigenisation and Economic Empowerment is negotiating with Old Mutual and its banking division CABS to unlock $5,1 million under the Youth Fund, which had been withheld after borrowers failed to refund initial loans.

In 2011 Government allocated $10 million towards the youth empowerment programme, which was accessed through loans via CABS, but of that money only $4,9 million was utilised..

Speaking at a National Economic Empowerment Strategy conference Youth, Indigenisation and Economic Empowerment Minister Patrick Zhuwao said:

“Government allocated $10 million to the youth fund and $4,9 million was loaned and the remaining $5,1 million was locked after the youth failed to pay back the loans.

“As the Ministry of Youth, Indigenisation and Economic Empowerment we are negotiating with Old Mutual to unlock the remaining $5,1 million so that it can be to be accessed by the youth to start their projects,” he said.

Of the $4,9 million loaned out, only $1,7 million has been paid back, the minister said.

He said the law will be applied to defaulters of the initial tranche of loans.

“Government negotiated the loans from the banks offering state security as collateral to the youths and the banks are demanding their money from the Government, so this has forced us to apply laws to the defaulters starting next year,” he said.

“The financial institutions have requested the ministry to allow them to take the normal procedures towards recovering their facilities and we have allowed them to start next year,” he said.

He added that those who have not repaid the money must negotiate with the banks and make commitments to the banks on how they will pay back the loans.

During the time the youth fund was allocated to the youths, banks say the level of non-performing loans increased to 97 percent.

Minister Zhuwao said those who are not complying with the laws must know that Government provided security for them and their properties can and will be attached.

In the 2016 National Budget Finance Minister Patrick Chinamasa allocated $2 million towards youth projects; this means that at least $7,1 million can be availed to the youth if the Youth Fund is restored.

This will be in addition to the $10 million Localised Empowerment Acceleration Facility (LEAF) that was launched last month.

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