Repayment of youth business loans slow
Keikantse Lesemela | Thursday April 10, 2014 10:41
Seretse said the introduction of the local procurement scheme – a 20 percent reservation of government micro percent procurement activities for the youth, women and people living with disabilities – should help improve the situation. “This initiative will go a long way in assisting the sustainability of youth owned projects and it is meant to provide market access to products from youth companies”, said Seretse. In the financial year 2013/14 government ministries have awarded a total of P109.8 million worth of tenders to youth owned businesses.
“We are hopeful that the introduction of the local procurement scheme approved by government in July 2013 will improve market access for products from youth companies and in the process improve their performance,” he said.
With particular reference to livestock loans, Seretse explained that since 2009/2010, 1,480 young people have been funded. Of these, 1,057 were supposed to be servicing their loans during the year 2013, taking into consideration the grace period of 36 months for cattle and 12 months for small stock. But only 343, said the acting minister, “are servicing their loans satisfactorily whilst the rest are inconsistent in this respect.” He said the ministry had done an assessment to establish the extent to which the 2013 drought specifically affected loan repayment of the YDF by young people funded for livestock production. “It may therefore be inaccurate for me to directly link failure to meet loan repayment obligations by young people running livestock projects to the 2013 severe drought,” said Seretse.
He noted that the defaulters are not necessarily those in breeding livestock. “They produce and sell according to the market demand. Therefore the issue specifically regarding the breeding projects does not arise”.
He said with the exception of six young farmers who lost their livestock due to the Foot and Mouth Disease 2012 eradication exercise in Zone 6 in Tati East, the ministry had not experienced defaulting repayments due to loss of animals. The Ministry of Agriculture is assisting the affected young farmers during the ongoing restocking exercise, he said.
“If beneficiaries lose all their livestock before meeting their loan obligations, my ministry would conduct an assessment and come up with appropriate interventions. However payment of the loan is an obligation for all funded young people,” he said.
On the mainstreaming project Seretse said 45 youth owned projects have been funded by CEDA at a cost of P26 million creating employment for 160 young people. He said during the period under review, the Ministry of Infrastructure, Science and Technology awarded tenders valued at P32 million to 47 youth owned construction companies and 42 individual youths with vocational skills in construction.