Karonga-based non-governmental organisation, Foundation for Community Services (Focus), has faulted Paladian Africa Limitedâ€™s social responsibility loans, describing it as a mockery to the people of the district.
But Paladin, which mines uranium at Kayelekera in the northern Malawi district, insists the loans would improve the lives of people in the area.
Paladin engaged a lending institution, Microloan Foundation, to be giving small-scale loans to communities in the district as one way of improving their lives.
Microloan Foundation has confirmed getting funding from Paladin for the project and that it charges 24 percent per annum interest rate.
But Focus executive director Kossam Munthali said in an interview on Monday this week the interest rate defeats the whole purpose of social responsibility.
â€œThe way we understand it, social responsibility is what Paladin is doing to benefit the people of Karonga. But giving money to a lending institution to charge interest to the community defeats the whole purpose of social responsibility,â€ he said.
Munthali argued the loans could have been interest-free to enable many people to access them.
Paladin general manager (international affairs) Greg Walker insisted the money provided to Microloan Foundation is part of the companyâ€™s social responsibility.
He said Paladin provided $25 000 (about K6.2 million) to Microloan Foundation to give loans to the community there.
Microloan Foundation regional manager (North) Jack KazembeÂ said: â€œThere was a commitment to give us $25 000, but only $18 750 [about K4.6 million] has been released. So far, K3 138 000 has been spent and 308 people, all women, have accessed the loans.â€
Kazembe said 10 villages within the radius of between 40 and 70 kilometres of Kayerekera Uranium Mine have benefitted from the loans, with the maximum amount of money borrowed pegged at K13 000. The loans are being repaid over a 16-week (four months) period.
Paladinâ€™s social responsibility under the terms in the Kayelekera Development Agreement include provision of water supply, school, hospital and upgrading of Karonga Airport.