Govt unveils $10m for empowerment
Farirai Machivenyika Senior Reporter
Government yesterday unveiled a $10 million Localised Empowerment Acceleration Facility (LEAF) to fund youths, women and disabled people’s enterprises through a partnership between Government and the financial services sector.
This comes after Government launched the revolving Youth Development and Employment Creation Fund almost four years ago, which failed because of the low repayment rate by beneficiaries.
The $100 million Youth Development and Employment Creation Fund got its funds from CABS and Stanbic Bank, which had contributed $10 million and $20 million, respectively, at the time the fund ceased to operate.
The new funding scheme, which will operate on tight rules to ensure the funds are paid back, was launched by Vice President Phelekezela Mphoko in Harare yesterday.
The fund is a response to calls for the establishment of a financing model targeting youths that was made at the inaugural Economic Empowerment Conference held last month.
VP Mphoko welcomed the initiative as one of the responses to the 10-Point Plan enunciated by President Mugabe in his State of the Nation Address recently.
“Most importantly, LEAF is designated to enhance the National Economic Empowerment Strategy, whose primary objective is to accelerate empowerment through localising the 10-Point Plan which was presented to the nation by His Excellency President Mugabe and adopted by the Government of the Republic of Zimbabwe,” he said.
“The primary objective of LEAF is to enhance economic participation by local communities for increased localised economic production. LEAF will effectively contribute to achieving Zim-Asset vision: ‘Towards an Empowered Society for a Growing Economy’.
“Ultimately, LEAF aims to establish a framework for the acceleration of economic empowerment, leading to increased production in the economy.”
VP Mphoko said LEAF would enhance broad-based economic empowerment through participation of local communities.
“Ultimately, the primary objective of LEAF is to establish a framework that enhances economic participation by local communities, thereby accelerating economic empowerment, leading to increased production in the economy,” he said.
“LEAF will also effectively engage and begin to provide some remedy to the challenging unemployment levels in the country. It will enable enterprising young people, women and disabled persons within our local communities to start their own businesses, and in doing so create employment opportunities from the very grass roots within our society.”
VP Mphoko said the facility would enhance entrepreneurial and business management skills development in both the rural and urban areas.
He said the partnership between Government and the financial services sector under LEAF was a way of restoring confidence in the sector.
“Ultimately, LEAF becomes a framework to re-establishing confidence by the financial services sector in our young people though ensuring that those who will benefit from LEAF shall and must have the financial discipline critical to having our young people play a critical role in growing our national economy,” said VP Mphoko.
“It is true that the youth have unfortunately been associated with lack of financial discipline and non-performing loans, such that the financial services sector has almost avoided providing capital to youth entrepreneurship.
“You must also accept responsibility for such perceptions as young people, but begin to honestly re-engage to have unlocked new streams for funding your enterprise development, stream-based upon financial discipline and improved credit rating.
Speaking at the launch, Youth, Indigenisation and Economic Empowerment Minister Patrick Zhuwao said the facility would be non-partisan and would be distributed equally in all constituencies.
“It is a facility for all young people and indigenous Zimbabweans irrespective of their political orientation or beliefs,” he said. “I will only call upon us to do away with the now too common mind-sets that such facilities are partisan, it only leads to self-alienation of otherwise enterprising young people and tomorrow’s leaders of our economy.
“We must also note that LEAF shall be distributed equally among all constituencies across the country, irrespective of the Member of Parliament presiding in that constituency.”
The facility will be availed to all constituencies and wards and will target youths who paid back their loans from the Youth Development and Employment Creation Fund.
The beneficiaries would be required to have undergone a series of capacity building workshops, which include personal interviews, to verify the knowledge base in the intended business, financial and economic literacy, entrepreneurial and business management skills through the Start and Improve Your Business ILO based training.
The ministry will work together with the Reserve Bank of Zimbabwe which will issue certification and credit rankings to the youths.
The certificates to be issued by the RBZ to the youths will constitute the documentation they will use to access the loans.
Speaking in an interview after the launch, Minister Zhuwawo said there would be tight screening on prospective beneficiaries of the new scheme.
“This is a new facility which is totally separate from the other youth facilities that has been set before,” he said. “However, its operationalisation will borrow from the experiences of the past facilities that were set up. We will be looking at the loopholes that were noticed in the previous set-up and will use those to ensure that we do not have a repeat of the same mistakes that were made then.”
Minister Zhuwawo said they would use database from previous schemes to assess the kind of projects and beneficiaries.
He said they were reviewing CABS and Stanbic facilities to plug gaps that were noticed in preparation for their re-launched most probably before the end of the year.