Editor's Comment

Don’t take loans for granted

THE decision by Government to discontinue the disbursement of youth empowerment loans until it devises a better recovery mechanism following failure by beneficiaries to pay back the money is not only inevitable but long overdue.
Government desires to empower young people through Youth Development Fund. This is because it is cognisant of the role youths play in the development of our country.
Given the high unemployment levels in Zambia, the youth development fund was aimed at establishing youth entrepreneurs who would not only improve their own livelihoods but contribute to job creation and national development.
As such, the youth development fund was set as a revolving fund for sustainability and to benefit as many youths as possible.
Youths who benefit from the fund are therefore expected to pay back the money after establishing themselves in business ventures for others to access the same fund.
It is however disappointing that out of the K53 million given out to youths across the country, only K1.6 million has been recovered.
This has prompted the Ministry of Youth, Sport and Child Development to discontinue the loans to figure out better ways of recovering the money.
Certainly Government cannot continue pumping money into a revolving fund that is actually static. This is not part of the plan for the fund.
Money is supposed to go out and in to benefit more people. If this is not happening, as is evidently the case, there is no point in continuing.
As the situation stands now, the fund is not sustainable because Government cannot afford to continue sourcing for money to empower more youths.
We therefore expected youths to be responsible by investing the money wisely and paying back what is due to Government for others to also benefit.
Failure by youths to pay back could be because most of them misused the money or invested wrongly.
It is also possible that while youths were empowered financially, they lacked the necessary skills and knowledge to successfully engage in entrepreneurship ventures.
It could also be that some of them are just irresponsible and have a misguided notion that anything from Government is supposed to be free.
The high defaulting rate by the youth development fund beneficiaries certainly calls for interrogation of the way the fund was being administered.
Those charged with the responsibility of disbursing the fund must put in place stringent measures to ensure that only deserving youths with practical and bankable business proposals access the fund.
This calls for sealing of loopholes that may give room for corruption to rear its ugly head.
There is also need to conduct integrity checks on the youths that apply for funds to avoid giving money to conmen with no intentions of paying back.
It would also be prudent to empower youths with skills and knowledge before allowing them to access the funds.
This will help reduce the rate of failed business ventures, which subsequently affects the ability of beneficiaries to fulfil their loan obligations.
The education curriculum should also be aligned in such a way that youths are introduced to entrepreneurship early in their formal education.
This increases the chances of raising successful entrepreneurs with potential to make significant contribution to national development.
Going forward, it will also be necessary to put in place a monitoring mechanism and mentors to follow up on all beneficiaries of the youth fund. This will ensure accountability on the part of youths.
This will also help identify genuine challenges that some of the beneficiaries may be encountering and find possible solutions in good time.
For now the Ministry of Sport, Youth and Child Development needs to find ways of recovering the K51.4 million still held up by beneficiaries.
Ultimately there is need to mete out punishment on defaulters to deter others. Government could consider community service as punishment for those who unjustifiably fail to fulfil their debt obligation.
Regardless of the shortcomings, the Youth Development Fund initiative is well intended and has potential to increase the country’s economic fortunes, only if it is properly administered.
It is now up to the ministry to expeditiously come up with better recovery mechanisms to avoid disadvantaging deserving youths like those who fall in the category of the 2 percent who fulfilled their loan obligations.

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