Neef disburses K34bn, to boost job creation
National Economic Empowerment Fund (Neef) says it has disbursed K34 billion in loans to various groups and individuals between February 2021 and May 2022, a development experts say could lessen economic inequalities.
The disbursed funds have reached over 105 000 beneficiaries, who are engaged in various businesses in the country.
Of the beneficiaries, 70 percent are women and 25 percent are youths, according to Neef figures.
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In a written response on Monday, Neef spokesperson Whytone Kapasule said this means the fund is on the right track in the provision of diversified loan products to micro, small and medium enterprises.
He said: “This means that Neef is contributing towards the realisation of the one million jobs agenda by the government.
“People who got loans have started businesses and employed others in these businesses.”
Kapasule said the loan collections rate currently stands at 60 percent.
He admitted that failure to disburse loans due to huge volumes of applications has resulted in too many complaints bordering on delays, but said they have recruited data entry clerks, loan officers, area supervisors and credit analysts to fast-track review and approval of loan files.
“Lack of cheap source of funding to do on-lending and serve more Malawians and the funding from the government cannot meet the huge demand for loans on the market,” said Kapasule.
In 2020, Treasury committed to capitalise Neef with K75 billion which was supposed to be disbursed in phases.
In an interview, National Small and Medium Enterprises national coordinator William Mwale said while some small-scale businesses are benefiting, he rues Neef loan conditions as prohibitive and not different from what commercial banks are offering.
He said: “The Neef loans have many bottlenecks that will leave out many small and medium enterprises who intend to borrow.
“The requirements are stringent, not different from commercial banks or other loan predators. The government should make these loans responsive to the needs of those in need to start or expand their businesses.”
Economist Milward Tobias, who is executive director for Centre for Research and Consultancy, said a capital injection of K34 billion is quite significant and can make an impact on the livelihoods of beneficiaries and the economy.
“We need a mechanism to track that there is graduation to next level of business,” he said.
