Fund disburses K5.8bn to new beneficiaries

The National Economic Empowerment Fund (Neef), formerly Malawi Enterprise Development Fund (Medf), says it has disbursed K5.8 billion to 2 438 new beneficiaries since the resumption of the new loans in February 2021.

In a written response, Neef spokesperson Whytone Kapasule said the amount represents about 24 380 individual clients.

He said for loans disbursed in February this year, their due time was March and have so far recovered K596 million.

“This represents a recovery rate of about 97 percent and by extension, this means we have K17 million that is yet to be collected for the loans that were due in March and April 2021,” Kapasule said.

He said that of the K6.5 billion that Neef predecessor, Medf disbursed in 2020, they had recovered K400 million by December 2020.

“To recover the K6.5 billion, the clients need to be informed of the need to repay the loans,” he said.

Medf borrowed the K6.5 billion from Export Development Fund.

The new administration restructured and rebranded Medf to Neef purportedly to improve service delivery.

The move saw government injecting K75 billion capital in the 2020/21 National Budget to benefit micro, small and medium enterprises to spur economic development.

National Small and Medium Enterprises national coordinator William Mwale described the Neef conditions as prohibitive and not different from what some commercial banks offer.

He said coupled with collateral demands for existing small-scale businesses, Neef loans will only benefit established businesses at the expense of small businesses that need capital.

“Generally, the Neef loans have many bottlenecks that will leave out many small businesses who intend to borrow,” he said.

Speaking recently during a women’s business summit in Lilongwe, President Lazarus Chakwera expressed displeasure with the lack of progress and innovation in the disbursement of loans through the Neef.

He said he had received complaints from businesswomen and youths about how prohibitive the loan scheme is.

He said: “We created Neef to be a bridge, not a barrier. I expect the Minister of Finance to work with Neef and the local banks on these issues and devise solutions, including new and sustainable ways of funding the programme.

“I will not abide the notion of going into the next fiscal year with the problems in the design of the Neef programme that people are complaining about this year”.

 According to Neef, the loans have mainly targeted the youth and women.

Access to capital remains a challenge for small businesses in the country as they lack basic requirements such as collateral.