High interest rates sink govt youth funding initia...

High interest rates sink govt youth funding initiative

Nyashadzashe Ndoro

CHIEF REPORTER

The government’s efforts to empower youths through funding initiatives have been hindered by high interest rates, leaving many young people struggling to access loans.

During a parliamentary question and answer session on Wednesday, Marondera East legislator Vimbai Mutokonyi raised concerns about the challenges faced by youths in accessing funds, particularly in rural areas.

“We have a lot of youths with bankable projects, but unfortunately, they cannot get the funds ... if any project proposals are coming from the districts, they can access the funds,” he said.

The Minister of Justice, Legal, and Parliamentary Affairs, Ziyambi Ziyambi, acknowledged the challenges, stating that the government is committed to ensuring that youth empowerment programmes are funded.

However, he stated that the availability of funds is subject to the country’s economic situation.

“However, what then happens is that in any situation, it then becomes subject to the availability of funds in our endeavour to ensure that we take care of every aspect of our society and the economy. The Treasury then allocates funds that are available depending on the scenario that exists at that particular juncture.

“The Government remains committed to ensuring that issues that deal with youths are tackled, and the youth empowerment programme is tackled, hence you will realise that last week, His Excellency launched the National Youth Service that will inculcate that sense of patriotism in youths and the sense to have that appetite to work for their country.

“So, the short answer is yes, the Government is very much committed to ensuring that the youths programmes are funded and that they are up and about,” the Minister said.

The high interest rates charged by Empower Bank, a bank specifically created to support youths, have been a major obstacle.

Norton legislator, Rechard Tsvangirai pointed out that the bank is lending at an interest rate of 30%, which is unsustainable for young people.

“One of the major challenges that young people are facing in terms of financial inclusion is that banks are lending, the interest rates that the banks are charging to young people are too high ... to young people, that is not sustainable,” he said.

The Minister responded: “On the contrary, the reason why the Empower Bank was created is to ensure that our youths ... get funding at a concessionary rate with lower interest rates.”

The legislators highlighted that high interest rates have left many young people struggling to access loans, hindering their ability to start businesses and contribute to the economy.

Mutokonyi reinforced the need for the government to ensure that the funds are accessible.

“We want to ensure that all youths access that particular funding ... we want to ensure that all parts of the country can access that particular funding.”