Thabiso Nxumalo
Youth in Masvingo have raised concern over lack of collateral security in accessing funds from the government owned Empowerment Bank that is meant to benefit youths with business loans as part of capacitating them financially towards vision 2030.
This revelation was made during the Parliamentary Portfolio Committee (PPC) on Youth, Sport, Arts and Recreation public hearing on the impact of Empowerment Bank on youth empowerment held on June 7, 2022 at Masvingo council hall.
Amongst a cocktail of queries, the most popular was that of collateral security.
One of the participants Charles Munganasa who identified himself as a member of the ZANU PF, Masvingo youth wing said collateral was a major cause for hindering youth in accessing loans.
“The core objective of the bank is to empower youth but the problem then arises when we are asked for collateral, of which most youth do not have and thus our projects fail to take off, defeating government efforts to empower us,” said Munganasa.
Another participant present at the meeting also echoed Munganasa’s sentiments and further blamed government for inconsistency in the application of statutory instruments.
“Collateral is the elephant in the room and also government is not consistent in terms of applying statutory instruments as witnessed by the banning of lending by banks which was a major blow to banks especially Empower Bank that caters for us and solely focuses on lending, though this directive took an about-turn two weeks later.
Empower Bank Head of Retail, Betty Sibanda poured cold water on the matter saying sometimes they go out of their way to assist youth in accessing loans and the collateral issue was not a crunch as youth can always engage their parents.
“We understand that the group we are serving does not have collateral, so in such a case youth can engage parents as we accept movables, for example, have their parents offer a cow or cows as form of collateral depending on the amount required,” Sibanda said.
EmpowerBank Masvingo branch manager, Wellington Chirambira said they were making a steady progress having had disbursed ZW $51 million worth of loans in the province since the programme’s inception.
“We have since inception in July 2018 empowered 169 youths in loans disbursing ZW $51 million and I can say that we are on the right track in empowering youths,” said Chirambira.
Masvingo province had 308 005 youths according to 2012 National Census and EmpowerBank has so far assisted 169 in three years, 11 months.
