Neef sees progress in loan recovery
The National Economic Empowerment Fund (Neef) says it has registered remarkable improvement in loan recovery despite challenges.
Responding to our questionnaire, Neef spokesperson Whytone Kapasule said about K5.7 billion was collected in four month between November 2022 and early February 2023. This puts the overall recovery rate at 58 percent.
He said: “This is unprecedented and it all accounts for the efforts the fund is employing to ensure that all loans are recovered so that we can recapitalise the fund and disburse to clients as demand for the loans surges.”
However, Kapasule said the amount is below the minimum target that the fund had set of 80 percent by that period, attributing challenges in loan recovery to preconceptions that government loans are grants and the global economic meltdown.
“Malawians are bad at loan repayments. This has been aggravated by some borrowers’ mindset that these are grants,” he said.
However, Catholic Commission for Justice and Peace national coordinator Boniface Chibwana and Centre for Social Accountability and Transparency executive director Willy Kambwandira faulted political interference as the major setback to the loan recovery.
Chibwana said: “People get loans, start up businesses but three-quarters of the businesses fail. In addition, most of the beneficiaries are politically connected and they think they are being rewarded.”
Kambwandira said it is not surprising that Neef is struggling to recover its loans as the identification of beneficiaries is mostly based on political affiliation and patronage.
“In the end, responsible entities such as Neef tolerate lack of transparency, and accountability by not enforcing the laws. These loans are largely abused by politicians,” he said.
Kambwandira asked the government to enforce relevant laws and regulations to recover the revolving so that others benefit.
Neef planned to disburse K60 billion to about 200 000 people between February 2021 and March 2023 but had only disbursed K53.9 billion to 133 558 clients by last month. The fund expects to reach K60 Billion by the end of the financial year next month.
