Banks wary of councillors
As the controversy surrounding the K1 million motorcycle loans, which government promised ward councillors rages on, it has emerged that commercial banks are sceptical about the status of the Local Government officials.
Conditions of service for ward councillors that were approved by government after consultations with key stakeholders in decentralisation are not meant for full time employment, but just to facilitate their operations.
In an exclusive interview with Malawi News, Minister of Local Government and Rural Development, Tarsizio Gowelo, said there were complications in ward councillors’ access to loans which the latter don’t seem to appreciate.
Gowelo, who once described as inapplicable the councillors’ demands that their motorcycle loans be upgraded to motor vehicle loans, said for Members of Parliament (MPs), it was easy to access the loans with government as the guarantor because the lawmakers were salaried.
“We have explained to them (councillors) that we are doing the best we can, which is talking to the financial institutions because at the ministry, we don’t have this kind of money. Even for the MPs, you will notice that they have loans but on arrangement with the banks.
“Now, that is a negotiation process that takes quite some time and similarly, we have been trying to negotiate with financiers so that this money could be loaned to the councillors,” said Gowelo.
But in an interview on Thursday, president of the Malawi Local Government Association (Malga), Samson Chaziya, charged that according to the conditions of service of the councillors, there is nothing like the loans being accessed from the banks.
Chaziya added that in the absence of the loans, the councillors were facing mobility problems as their wards were expanded.
“Our conditions of service were prepared by government and obviously, they were aware of what they were doing. We were promised that we would be given K1 million each in loans, and they never said they would link us to the banks. They knew where they would get the money from,” said Chaziya.
He added that as far as the councillors were concerned, the issue of banks being sceptical about their status does not even arise because “banks are nothing to us”.
“If you tell a child to go to school and then you don’t send school fees, uniform, et cetera, then you have a problem as a parent. But what I can say is that some people are just playing politics in this thing. They don’t wish us well,” said Chaziya.
He also maintained that his association’s earlier decision to meet President Peter Mutharika on the delayed councillors loans still stands, saying he will soon invite all the council chairpersons to map the way forward.
But, while insisting that the councillors should first continue engaging their parent ministry, Gowelo said they have a democratic right to meet the president.
He added that his ministry is still trying to find alternative ways of getting the councillors’ loans, “but if they feel that they are not being assisted, and therefore they would want to meet the Head of State, obviously as the minister responsible, I wouldn’t stop them in respect of the principles of democracy”.
“This is a monetary issue and you cannot expect it to be solved overnight. There is the question of monthly repayments. You know as a principle, councillors are not salaried members. They get honoraria and some kind of allowance and so on.
“That makes it difficult for financiers to release the money that the councillors were promised. But we have not stopped there as this remains an ongoing subject,” said Gowelo.
Some commercial banks officials that we talked to said the conditions for loans for politicians depend on their own conditions regarding their remunerations to the effect that allowances are not part of the access requirements
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