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Neef defaulter risk arrest

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By Wezzie Gausi:

The National Economic Empowerment Fund (Neef) has threatened to arrest individuals that have defaulted on loans.

Neef acting Executive Director Humphrey Mdyetseni was speaking when the organisation appeared before members of the Budget Committee of Parliament on Thursday in Lilongwe.

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He said, out of K6.4 billion that was disbursed across the country, only K539 million had been recovered.

“Recoveries on the K6.4 billion [loan] have been far below expectation, with only K539 million being collected, representing a meagre eight percent national recovery rate. This is uncalled for and we are requesting all the people owing the organisation to pay back or risk arrest,” Mdyetseni said.

He attributed failure to pay back loans to procedures that were heavily compromised, blaming politicisation of the activity.

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“Applicants were not properly assessed at all. All loans were disbursed outside the loan monitoring system. Of course, currently, loan officers are following up on customers with delinquent loans and repayment plans are being reviewed,” Mdyetseni said Budget Committee of Parliament Chairperson Gladys Ganda encouraged people to pay back the loans for others to benefit from the same.

“What Neef is saying is understandable. The loans are meant to be paid back, hence anyone who is trying to default should pay back or face the law,” Ganda said.

Meanwhile, Neef has asked the committee to lobby for an additional K20 billion from the government so that it can have a total of K50 billion.

“The K50 billion would enable the organisation to disburse K200 million to every constituency in the country,” Mdyetseni said.

Currently, Neef has K30 billion, out of which K10 billion is from the government, K10 billion would come from development partners while K10 billion would be collected from disbursed loans.

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