Fund says 42% of youths benefit from K43.8bn loans

National Economic Empowerment Fund (Neef) says 42 percent of the youth have benefited from the K43.8 billion soft loans disbursed thus far.

This means that Neef disburded K18.2 billion to young entrepreneurs.

In a written response on Friday, Neef public relations officer Whytone Kapasule said the 42 percent is equivalent to 56 472 youths out of 119 398 beneficiaries spread across the country.

“Currently our loan repayment rate is at 65 percent, but we are still working hard to achieve our projected minimum rate of 85 percent so that we serve other people who are on the waiting list,” he said.

Kapasule said the loan repayment rate has jumped from 30 percent last year.

Mzimba district youth officer Geoffrey Mwase commended Neef for the loan initiative, saying it will help to create jobs and business opportunities for the youth.

He said the initiative inspires youths to hatch business ideas rather than waiting for formal employment.

In an interview, economist Milward Tobias said the injection of Neef soft loans into the economy could help to cushion businesses from the harsh economic environment.

He said such a capital injection can also help to cushion businesses that would have collapsed due to the impact of the Covid-19 pandemic.

Said Tobias, who is also Centre for Research and Consultancy executive director: “This is good news economically. It means that there has been a capital injection to support businesses.

“Given the effects of Covid-19 on businesses, the capital injection certainly is a cushion to businesses.”

He said if properly planned and executed, Neef loans can anchor many industries.

Neef chief executive officer Humphrey Mdyetseni is quoted as having said that they have increased the minimum loan amount per individual to K250 000 from K50 000.

He said the maximum loan amount for a group was also increased to K250 million from the previous K75 million to cater for the establishment of micro industries.

Said Mdyetseni: “The equitable disbursement of loans reaching every corner of the country underscores the inclusiveness that has been taken this time around.

“We believe that when we disburse up to K75 billion in the 2023-24 fiscal year, nearly 300 000 Malawians will have been covered. This, however, is not a satisfactory target on our part as we strive to exceed the K75 billion depending on increased revenue mobilisation.”