Editor's Comment

Learn to repay loans

WHEN Minister of  Youth and Sports Chishimba Kambwili was launching the 2012 Youth Development Fund (YDF), he warned that Government will not hesitate to bring to book any youth group that will fail to pay back loans that they will access from the YDF.
Minister of Commerce, Trade and Industry Bob Sichinga also reiterated the same warning when he said Government would put up stringent measures to ensure that those who access money from the Citizens Economic Empowerment Commission (CEEC) pay back the money.
All these warnings are coming out as Zambia emerges from a background where many local entrepreneurs had been defaulting on paying back loans which they obtained.
So far 17 youth entrepreneurs have failed to repay loans of over K331, 000 obtained under the YDF in the Eastern Province and Government is contemplating taking them to court.
The rate of default among Zambians is quite high and as at September 2012, out of K4 million that was disbursed under the MMD government, only about K100,000 has been repaid.
This culture needs to change because it is hindering business development which is crucial for job creation to contribute towards poverty reduction.
When beneficiaries pay back, it means more people will benefit because the money goes back to a revolving fund from which others can also borrow.
This week the CEEC launched the K22 million dairy value chain development programme in seven provinces with a call to beneficiaries to repay the loans.
CEEC will support 377 projects to create an estimated 904 jobs with K22.8 million to be disbursed to beneficiaries in three sub-sectors, namely processing and handling of milk, and production of stock feed for dairy animals.
We welcome this development because it will go towards empowering local small and medium enterprises with capital, which they can invest in starting businesses or expand existing ones.
But much as we commend the Government for these projects, we would like to advise beneficiaries that they should not consider this money as Christmas bonus to use recklessly.
Those who will be funded must avoid going to buy luxury goods but put the money to good use.
Beneficiaries of the CEEC facility and those who will be funded by the YDF must ensure they have viable business plans that will work to enable them repay the loans.
Various government officials and officers from financial institutions have bemoaned the fact that most people have a habit of not servicing their loans and end up creating bad debts.
With poverty still ravaging, thousands of people, it makes little business sense to squander borrowed money and remain indebted.
We are urging the CEEC and YDF to help in training those who get the loans and impart business knowledge to them so that they invest the money wisely.



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