ZIMBABWE Youth Council (ZYC) Harare Province has called for a review of the chairing and administration of the $10 million Kurera Youth Fund financed by Old Mutual (OM) amid revelations of an 85% default rate among the beneficiaries.
ZYC Harare chairman Acie Lumumba said it was time the Ministry of Youth, Indigenisation and Economic Empowerment relooked at the manner OM was administering the fund as there was conflict of interest within the group running all the operations of the fund.
OM released the $10 million loan to the youth fund as part of its indigenisation plan where the Ministry of Youth received 2,5% shareholding of the behemoth financial services company.
The loan fund is insured by RM Insurance and the fund is administered by CABS, both wholly owned subsidiaries of OM.
“Old Mutual should not monopolise the running of the fund,” Lumumba said.
“The Ministry of Youth, Indigenisation and Economic Empowerment should take full responsibility of assessing youth projects and recommend them for funding by the selected independent bank or institution which will be managing the fund.”
However, statistics availed yesterday at the Press conference showed that there was a high default rate among the beneficiaries of the first loan tranche.
The fund approved 3 601 of the 22 000 applications it received. Approved projects were cumulatively funded to the tune of
$5,2 million. The average loan size for the projects was $1 400.
“Non-performing loans stood at 79.4% and is projected to hit 85% in the fourth quarter,” the statistics read.
The majority of the approved projects (53%) were in agriculture with the remainder (47%) going to distribution and mining enterprises. The beneficiaries were largely male youths who constituted 65% with the remainder going to females.
It was also revealed that youths from Harare, Manicaland, Mashonaland West and Mashonaland Central provinces constituted the majority of the beneficiaries.