Youth decry poor access to loans
Young entrepreneurs have decried poor access to capital, prohibitive bank rates and unreasonable demands for collaterals for hampering growth of small and medium scale businesses.
The youth were speaking at a business conference organised by Youth to Youth Empowerment in Mzuzu on Monday.
In an interview, Wangiwe Kambuzi, the organisation’s coordinator in the North, urged government to put in place a youth entrepreneurship policy to tackle the setbacks.
certificate as collateral
The youth mostly lack vital financial information, including bank rates, securities and taxation.
“We don’t really understand the banking rates. Malawi has the highest lending rates in southern Africa which makes access to bank loans difficult,” said Kambuzi.
Poultry business operator Limbani Chimimba said it was unreasonable for some financial institutions to ask for houses and cars as collaterals for the youth.
Conceptor Kachoka, service centre manager of Technical Entrepreneurial Vocational Education and Training Authority (Teveta) in the region said to deal with the challenge in the North, the State-run organisation has signed an agreement with Opportunity Bank of Malawi (OBM) to ease access to business capital.
Last year, the bank disbursed loans worth over K20 million in the Northern Region.
“The trainees use their Teveta certificates as collateral,” she said.
However, she blamed some trainees of failing to utilise the startup tools that Teveta provides.
She said some of them sell the tools instead of using them effectively to develop themselves. n
