The Ministry of Lands has asked Parliament to allocate funds for loan recovery after the Decent and Affordable Housing Subsidy Programme (DAHSP)— commonly known as Malata subsidy—registered a high default rate.
The government has collected only K148 million out of the K6.3 billion that was meant to be collected under DAHSP.
In 2014, the Democratic Progressive Party-led administration launched the K12.6 billion Malata Subsidy programme which was expected to help poor Malawians in 193 constituencies build decent houses. Beneficiaries were asked to repay 50 percent of the total cost.
However, in 2020, the Tonse Alliance-led administration suspended the programme, citing rampant abuse.
Secretary for Lands Bernard Sande Thursday told the Local Authorities and Rural Development Committee of Parliament in Lilongwe that, so far, only K148 million has been recovered.
“The total amount of money that was applied to date for the loan component was K12.6 billion and, out of that amount— according to the terms of the programme— the beneficiaries were supposed to pay back half of that, which is K6.3 billion, but we have recovered K148 million so far,” Sande said.
He said loans for the beneficiaries were due at different times, but all the loans that were given out are expected to mature by the year 2024.
Speaking to journalists after the meeting, Sande was at pains to say how much the ministry needed to implement its loan recovery plan.
He added that some beneficiaries were deliberately failing to pay back the loans due to political interference.
The controlling officer claimed that some politicians were misleading people that they did not need to repay the loans.
Local Authorities and Rural Development Committee Chairperson Horace Chipuwa said the committee was not impressed with how the programme was implemented.
The committee has suggested that there should be a review of the project onwards.
Chipuwa said the committee would lobby Parliament so that it would give the Treasury the go-ahead to allocate the resources for loan recovery to the ministry.
“The committee will try to lobby for an allocation in the budget so that, when budgeting for the next year, they should include an item for them to use in recovering the loans,” he said.
The ministry has indicated that, from 2015 to 2019, at least 37,781 beneficiaries were reached out to.
However, out of these, 22,440 had their house fully rehabilitated while others are still waiting for materials to complete rehabilitation works.
The DAHSP was meant to benefit resource-constrained people by giving them material loans that would enable them to acquire a maximum of 30 corrugated iron sheets of 29/30 gauge of 10 feet each and a maximum of 30 bags of cement of 50 kilogrammes each and related building materials.
The programme was designed to benefit 68 households per constituency in a year, of which 63 would be on subsidy (loans) and five would be on grants – built freely for the poorest of the poor. In the first five years of the programme, a total of 66,000 houses could have been built.
Mathews Kasanda is a journalist who holds a Bachelor of Arts in Journalism from University of Malawi (The Polytechnic).
In 2015, Media Institute of Southern Africa awarded him the Best Print Media Education Journalist of the Year accolade.
He joined Times Group Newsroom in September 2019.