THE Central African Building Society (Cabs) youth fund, which was suspended early this year, will soon be fully operational after discussions with the government, Indigenisation minister Francis Nhema has said.
Cabs managing director Kevin Terry told the Parliamentary Portfolio Committee on Youth, Indigenisation and Economic Empowerment early this year that the suspended fund, which targets youths between 18 and 35 years, had underperformed with a loan default rate of 78%.
Speaking at a press conference on Wednesday Nhema said the Cabs youth fund would resume full operations but with recommendations that those youths who benefit from the fund will need collateral or a guarantor to avoid a repeat of the high default rate by youths that prompted its suspension.
“It (Cabs youth fund) is up and running but we are doing it in stages,” Nhema said.
He said that in an effort to recover the loans given to youths by Cabs, the ministry has asked the various provisional officers to follow up on the loans. In some cases, Nhema revealed, they have rescheduled the loans and in other cases have asked parents of the defaulters to help them recoup money.
Nhema said they will not take any of the defaulters to court.
“We have not taken them to court. We do not want to be harsh on them. It is a learning process,” Nhema said.
The minister said that only one bank has not complied with the indigenisation requirements.
He said the ministry is currently studying the indigenisation compliance proposals of the remaining financial institution.
Nhema said he had no problem with investors that have acquired more than the stipulated 49% shareholding in local companies particularly banks.
Mauritius-based Afrasia Bank Ltd has increased shareholding in Afrasia Zimbabwe Holdings Ltd to 62,5% with majority takeovers of Tetrad Investment Bank and Banc ABC. He said the investors have a five year period in which to eventually comply with the indigenisation laws.
Nhema said during the outreach programme by his ministry to the 16 operational Community Share Ownership Trusts, they had emphasised the need for the trusts to embark on programmes that will benefit the nation as a whole.
He said the country will host the meeting of Sadc ministers responsible for youth to be held between Tuesday and Friday at the Victoria Falls where a number of issues affecting youth in southern Africa will be discussed.