Mardef loans under spotlight

The consensus seems to be that the Malawi Rural Development Fund (Mardef) is a good idea that should continue, but there are hard questions to answer, according to a Nation on Sunday survey and analysts.

In the past week, Nation on Sunday has been asking whether Mardef loans should continue. Out of 1 040 respondents who took part in the opinion poll, 600 said the programme should continue while 440 want it scrapped.

While this is by no means representative of the national feeling on the issue, the poll provides important insights to policy makers into how people perceive the initiative.

Generally, those in support of the programme said Mardef is key to poverty alleviation while respondents who want the initiative stopped raised questions about the impact the loans have registered since the programme began in 2005 and political biases involved in identifying beneficiaries.

Human rights activist Billy Mayaya said on Saturday recovery of the loans is one of the key issues that have haunted the programme.

“Additionally, the selection of beneficiaries has more often than not been biased and skewed towards supporters of ruling party members,” said Mayaya.

National secretary of the Catholic Commission for Justice and Peace (CCJP) Chris Chisoni also decried the heavy hand of politics that he said chokes the loan facility.

“It is common knowledge that the facility is highly politicised which affects the recovery of the loans and also results into huge numbers of defaulters. We used to have SEDOM [Small Enterprise Development Organisation of Malawi] which was also a loan facility and it also saw politicians getting the money without paying back,” said Chisoni.

He said loan facilities will never be successful in the country if the political culture does not change.

Chisoni proposed that Mardef should be detached from politicians to be run by an independent body which would strenuously vet names of beneficiaries to make sure there are no abusers.

On his part, Mayaya said the programme should be scrapped if it does not have mechanisms to ensure sustainability.

“If problems continue, it would be prudent to scrap the initiative. As taxpayers, we are weary of programmes that continually throw money at a problem with no dividends. The age of free riding must stop,” he said.

Mardef was launched in January 2005 by the later president Bingu wa Mutharika as a fund for people who want to set up small businesses.

The programme has been marred by many problems such as low repayment rates, poor organisation and political interference.