The National Economic Empowerment Fund (Neef) has asked members of Parliament to push for an additional K20 billion to enable every constituency to benefit from a minimum K200 million loan facility.
Neef acting chief executive officer Humphreys Mdyetseni made the appeal on Thursday when the organisation met the Budget and Finance Committee of Parliament in Lilongwe to update it on the fund performance
Mdyetseni stressed that Neef, previously Malawi Enterprise Development Fund (Medf) needs K50 billion to reach out to all constituencies with a minimum of K200 million facility, but it has secured K30 billion.
He urged the committee to help fight for the shortfall of K20 billion to meet the constituency targets.
“In the November sitting, Parliament should allocate K20 billion. That way, every constituency will have a minimum of K200 million.
“Currently, every constituency stands to benefit a minimum of K100 million,” he said. Mdyetseni, however, said Neef operations have been affected by the settling of K13 billion loan that was sourced from Export Development Fund (EDF) and FDH Bank during the Democratic Progressive Party (DPP) government to kick-start disbursement of loans.
The K8 billion was from EDF while K5 billion was from FDH.
He said if government had allocated funds in the initial stage, Neef would not have been burdened with the loans, adding that the Ministry of Finance was initially supposed to settle the loan.
“The Ministry of Finance was supposed to repay those loans. That was an arrangement that was made by the previous government which initiated the borrowing of those funds. It seems the arrangement is yet to materialise, suffice to say EDF still thinks the money must be repaid as soon as possible because they need that money for their own other operations.
“So, we have amicably agreed with EDF to be repaying K175 million per month against K330 million which they wanted and we believe that while government is sorting out a lasting solution on how to settle that debt, we will be servicing little by little,” said Mdyetseni. Budget and Finance Committee of Parliament chairperson Gladys Ganda said the committee supports the move for additional resources, for it will help rural masses access the loans.
She argued that Neef was meant to serve poor Malawians most of whom live in rural areas.
“There is an outcry that the loans are mostly benefiting people in urban areas. The fund needs to benefit every part of the country including the rural masses,” said Ganda.
She recommended that the loan officers be employed by November to address gaps that are there.
Ganda also hinted that the committee will not only be monitoring performance of the loans, but also checking abuse following reports on the same.
So far, at least 46 000 people have benefited from the new loans.
Neef disbursed K12 billion from February 2021 to July end.