HARARE, March 20 (The Source) - Over 70 percent of loans disbursed under the youth fund in the past four years have not been repaid, prejudicing the government of millions of dollars, Parliament heard on Thursday.
The Central African Building Society (CABS) managing director, Kevin Terry told the Parliamentary portfolio committee on Youth, Indigenisation and Economic Empowerment that so far the society had approved 3,622 applications worth $5,2 million and had disbursed $4,5 million.
The average loan size was $1,438.
"Of the $4,4 million that we have disbursed, the arrears currently stand at $2,3 million with a total of non-performing balances of just over $3.1 million," he said.
"Statistics of the non-performing loans disbursed are just under 72 percent."
The chairperson of the committee, Justice Mayor Wadyajena, demanded detailed information on disbursements before asking Terry to bring more information.
Earlier, the Infrastructure Development Bank of Zimbabwe (IDBZ) chief executive, Charles Chikaura who appeared before the same committee, also complained about non-performing youth loans.
"At this stage these loans are non performing. There is still a chance to recover the money from the projects if the economic environment improves," he said.
"But if all fails we will have to litigate. That will be the normal procedure but we stand guided on that matter by the government."
The loans were being disbursed under the Youth Development Fund launched by government in 2006 as a revolving fund.
The projects managed by IDBZ were classified under the Integrated Skills Outreach Programme (ISOP), General Fund and Meikles Fund which were funded to the tune of $500 000 after re-launch in 2009.
The Meikles fund accounted for $200 000 of which half was yet to be disbursed.
Chikaura said initially the fund performed "extremely well" but later the projects started struggling partly due to poor economic performance.
He said there was need to restructure the facility to take into account the difficult operating environment.
For the ISOP fund, $223,000 was disbursed and only $150, 000 was repaid and for the General Fund $125,000 was disbursed and $7,391 was repaid. Under the Meikles fund, $102,000 was disbursed and $40 000 had been repaid.
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