ZANU PF’s Youth League has turned up the heat on the country’s largest mortgage lender CABS for failing to fully commit a US$10 million facility for on-lending to youth development programmes despite high levels of non-performing loans.
Wongai Zhangazha/Elias Mambo
In 2012, CABS, a unit of insurance giant Old Mutual Zimbabwe Limited, donated 2,5% of its issued share capital — equivalent to US$10 million — to a trust aimed at empowering youths.
CABS, using the shares from the trust as security loaned almost half of the fund to 3 608 youths out of the 22 000 applications, pitching it on a collision course with the ruling party after it tightened loan requirements to manage toxic loans.
The Zanu PF Youth League yesterday converged an extraordinary general meeting in Harare that was attended by Youth and Empowerment minister Patrick Zhuwao where concerns were raised on the conservative lending approach adopted by CABS.
Sources said Zhuwao pointed out that government was tired of the “cat and mouse” game that CABS was playing with the ministry.
Two years ago, CABS suspended disbursements from its US$10 million Youth Fund after defaults rose to 78% in June.
The youths are, however, claiming that out of the US$10 million CABS committed, only US$4 million was loaned out leaving many potential projects unfunded. They added that out of the funds that were advanced, US$1,7 million was paid back.
Zanu PF deputy youth secretary Kudzai Chipanga told the Zimbabwe Independent yesterdy that the meeting, which was convened by the national executive to seek clarity on the indigenisation law compelling foreign companies to cede 51% stakes to locals, also discussed the status of the CABS youth loans as well as the planned one million youths march to endorse President Robert Mugabe as the party’s candidate for the 2018 elections. The president will be 94 then.
“Youths also wanted clarification on why CABS is now requesting further collateral for the youths despite government giving it security in the form of shares.
“Yes there have been low repayment inflows, but there are some youths who repaid their loans,” Chipanga said.
“But for CABS to re-lend to the youths they are now requesting further collateral. So we are not happy with CABS which is not fulfilling its promise and is now playing a cat-and-mouse game with the ministry of indigenisation. We want to remind CABS not to plays games with Zimbabwean youths.”
l Meanwhile, war veterans yesterday held their second preparatory meeting for the April 7 indaba with President Robert Mugabe as factional fighting intensifies in Zanu PF.
Sources said the meeting, chaired by the secretary for war veterans in the politburo, Sydney Sekeramayi, who is also the Defence minister, resolved to allow the two warring war veterans factions into the no-holds-barred meeting set for next Thursday.
Last week, security ministers, state security service chiefs and war veterans held a meeting to prepare for their upcoming engagement with Mugabe on April 7, in a move clearly designed to prevent a showdown between the ex-combatants and their patron.
There was drama at the first meeting after some war veterans backing Manicaland Provincial Affairs minister Mandiitawepi Chimene wanted axed war veterans minister Chris Mutsvangwa to be barred from attending the crunch meeting. Mutsvangwa’s allies were pushing for Chimene, whom the High Court ordered to stop masquerading as war veterans leader, to be blocked from the meeting.
However, the differences have been resolved and both groups will attend the April 7 meeting.
There are two camps, one led by Chimene, which is aligned to a group of young Turks fronted by First Lady Grace Mugabe and the other by Mutsvangwa, a close Vice-President Emmerson Mnangagwa ally.
Permanent secretary in charge of veterans affairs Asher Walter Tapfumaneyi confirmed that the rival freedom fighters groups would be allowed to attend the meeting.
“It approved a total of 10 000 delegates to be invited. This figure comprises the president and his fellow leaders of the party who were in the liberation struggle, the entire leadership of the ZNLWVA from the national executive down to the district level,” he said.
“War veterans, who are in the civil service and war veterans, to be identified at district level, who may not be members of the association and do not at the same time hold any positions, will also be allowed to attend.”