By Isaac Salima:
Vice-President Michael Usi Thursday disclosed that the government will consider removing a condition that demands beneficiaries of the National Economic Empowerment Fund (Neef) to have collateral before obtaining the public-funded loans.
Speaking during a visit to several markets in Blantyre, Usi said the requirement adversely affects already impoverished Malawians.
“I was discussing with [President Lazarus Chakwera] that this collateral requirement does not make sense.
“For people who wish to benefit from this loan, requiring collateral is impractical. Where will they obtain it?” Usi said during his visit to Bangwe Market.
Last year, Neef announced the introduction of collateral insurance cover, requiring loan applicants to first insure their collateral with a local insurance firm which partnered with the public loan provider.
Previously, among other Neef requirements, applicants needed to cover life insurance costs and pay an average processing fee of 3 to 5 percent of the applied loan, as well as provide collateral.
Under the new arrangement, applicants must have life and collateral insurance to qualify for the loan.
Last year, Neef Chief Executive Officer Humphrey Mdyetseni justified the introduction of collateral insurance, saying the fee is affordable.
Usi first visited small-scale traders at Bangwe before proceeding to Chilomoni and later Chirimba markets.
The Vice President reassured the people that the government would ensure every eligible individual receives the loan to boost their businesses.
Usi further advised Malawians to strive for self-reliance and avoid exploitation by politicians.
“When they come with their money, ignore them because some only seek to exploit you for their gain. Work hard and have a purpose in life. We will support your efforts to secure loans,” he said.
