DOWA (MalawiTalk) – Government-owned microfinance firm National Economic Empowerment Fund ( Neef) has drastically slashed loans, a development which has worried beneficiaries.
In Dowa some women from Mponela said that they applied and signed for at least a K500,000 loan but to their surprise, they have been given K100 000 and that they have been told to begin repaying the loan the same month of loan receipt.
Program Manager for Mponela AIDS Information and Counselling Centre, MAICC Mr George Kaunda said through Nzatonse , a Tilitonse funded project, they will probe and bring to the attention of authorities of the irregularities facing the program.
Spokesperson for NEEF, Mr Whytone Kapasule has justified slashing down of the loans saying some beneficiaries were requesting more against their business plan.
Kapasule said Neef is struggling to recover loans disbursed last year under the Democratic Progressive Party administration.
“We disbursed in the region of K6.8 billion to a large number of beneficiaries. While the majority of the loans are yet to be recovered, there are some cases of excellent repayments in selected areas and groups,” he said.
An audit commissioned by Treasury in July 2020 exposed gross abuse of funds through ghost beneficiaries and misallocations.
After the Tonse Alliance administration was inaugurated last June, loan disbursements were suspended to pave the way for Neef restructuring.
In the 2020/21 National Budget, government injected K75 billion capital for loan disbursements to small businesses to spur growth of medium and small-scale businesses.
According to Neef, the loans have mainly targeted women and youths. The loan products targeting groups have a monthly 2.5 percent interest, 3.5 percent processing fee and 1.5 percent insurance.