National Economic Empowerment Fund (Neef) has said it has an inactive portfolio amounting to K19 billion.
Neef acting Chief Executive Officer Humphrey Mdyetseni was speaking at Parliament Building Tuesday when Neef and Ministry of Youth officials appeared before Public Accounts Committee (Pac) of Parliament officials to shed light on issues uncovered by the Auditor General when auditing 2010 to 2014 accounts.
According to Mdyetseni, politicians hijacked the fund, especially between 2010 and early 2020.
“And when we dig down into the records, [we find that] some [borrowers] were politically connected, some have long died because, remember, most of these loans were disbursed in 2012, 2013 and 2014.
“As we stand now, the recovery rate of the old Medef [Malawi Enterprise Development Fund] portfolio stands at less than 20 percent. Specifically, the last year’s portfolio that was given between May and June, the recovery rate has been at below 10 percent,” Mdyetseni said.
He said, of late, the level of political interference has greatly diminished as Neef is strictly adhering to loan disbursement guidelines.
During the meeting, Kasungu North Constituency lawmaker Mike Bango asked Mdyetseni to be more precise on the level of political interference by stating which group of politicians between presidents, Cabinet ministers, members of Parliament and regional governors were bringing their own lists of beneficiaries to Medef and Neef.
Pac Chairperson Shadreck Namalomba demanded to know why Neef officials were not strictly adhering to set loan disbursement guidelines between 2010 and 2020.
Mdyetseni said it could be unfair for him to comment on behalf of the former management of the fund, saying he only started working there in November 2020.
During the meeting, Secretary for Youth Development and Sports Oliver Kumbambe said, during the period in question, there used to be a department in his ministry— which was being manned by one person— which was responsible for Yedef and that the department wound up its operations when the officer responsible retired.
This prompted members of the committee to raise questions on the structure of the ministry and the department which was personal-to-holder.
But Kumbambe said the situation was like that between 2012 and 2014, and that things had changed as the ministry had undergone transformation over the years.
In October this year, the Office of Ombudsman said it was investigating allegations that Neef flouted loan procedures every now and then.
In September this year, Neef announced that it had disbursed K18.8 billion to 6,669 groups and 461 individual clients.
In November last year, an audit report by Central Internal Audit Unit exposed that Neef loan application and assessment procedures were weak and that K64 million was disbursed to beneficiaries that could not be traced by the audit team.