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Questions over K8 billion Medf loans

DPP strongholds get lion’s share

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SMILED THEIR WAY TO THE BANK—Tsoka Market vendors

Dust is refusing to settle at Malawi Enterprise Development Fund (Medf) over disbursement of loans targeting the youth and women.

Latest revelations indicate that Medf management has been politicising disbursement of the K 8 billion youth and women loans, specifically in favour of people staying in districts viewed as former ruling Democratic Progressive Party (DPP) strongholds.

According to the loan disbursement chart Malawi News has in possession, the disbursement of the loan was purely political as areas deemed stronghold of DPP received over 68 percent of the loan funds.

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Thyolo and Mulanje districts alone received K 1.8 billion while the whole Central Region got MK 1.2 billion of the K 8 billion that Medf disbursed between April and June 2020.

Of the MK 8 billion that Medf disbursed in the run up to the fresh presidential elections, K 4, 523, 820 857 which translates into 68 percent was disbursed in the Southern Region and that K 1, 992, 427 092 which translates into 32 percent, was disbursed in the Centre and North combined.

For example, in Kasungu District, beneficiaries were only from Traditional Authority (T/A) Kaomba while in Mchinji District, beneficiaries were only from the area of former DPP parliamentarian for Mchinji North East, Esther Asuman Majaza, who was a Deputy Minister at the time and in Lilongwe District, beneficiaries were only vendors from Tsoka market.

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The chart also exposed other massive irregularities in the disbursement of the Medf loan facility such as recruitment of ghost beneficiaries, bypass of agreed procedures and recruitment of officers at Medf Secretariat.

There were also allegations to the effect that processing of the loans was being done at Medf Head Office, by passing regional offices as forms were taken from the field directly to the Head Office.

It is claimed that group beneficiaries were being asked to open bank accounts at FDB Bank and that most loan disbursements were channeled to individual bank accounts despite bank queries.

This has prompted the Human Rights Defenders Coalition (HDRC), through its chairperson Gift Trapence to write a letter to the Office of the President and Cabinet (OPC), copied to Anti- Corruption Bureau (ACB) Director General Reyneck Matemba as well as the Auditor General.

“We have written the OPC, based on information we have; on allegations that have been arising during Mardef loan disbursement procedures… despite group beneficiaries being asked to open bank accounts at FDB Bank, most loan disbursements were channeled to individual bank accounts despite the bank queries,” Trapence said.

The human rights body further alleges that it has in its possession information that Medf regional managers were instructed not process loans in opposition strongholds.

HRDC further says it is surprised that Medf recruited two people who were getting different salaries for the same grade; a post that only required one person and that the second person was being paid more that seniors.

“HRDC is against discrimination of Malawi citizens from other regions from accessing Medf loans. Poor Malawians should be given equal opportunities in accessing such loans. HRDC is disappointed with ‘cadetish’ behaviour in the offering of such loans. Government should take action by disciplining officers who took such action,” Trapence said..

Meanwhile, Capital Hill has suspended disbursement of the Medf loans with immediate effect.

A statement dated August 19, 2020 signed by Secretary to Treasury Chancy Simwaka, shows that government suspended disbursement of the loans on July 3, 2020 in order to take stock of the loans and processes.

Government spokesperson, who is also Minister of Information, Gospel Kazako said the Tonse Alliance will not allow segregation when it comes to disbursement of Medf loans, saying they will not allow people from one district to have preferential treatment when it comes to accessing the loans.

“When it comes to loans, every Malawian will have equal opportunity to get them, what we will be looking for is their ability to do business and their capacity to pay the loans, Medf loans are not gifts… these are loans and when someone has gotten, he or she must pay back and this time around we will be very serious to correct back our money,” he said.

Meanwhile, Treasury spokesperson, Williams Banda, said the complaint by the HRDC will be dealt with before the next phase of loan disbursement.

Commenting on the issue, Medf Public Relations and Marketing Officer Whytone Kapasule said government has instituted an investigation at Medf and for the organisation to start commenting on those allegations now before findings would be jumping the gun.

“I know all Malawians are waiting with bated breath to hear what government’s investigations have uncovered and it will be proper for the Fund to reserve its comment up until the investigations are over for the nation to be told if there was wrong-doing by Medf or to exonerate the Fund,” Kapasule said.

Social analyst Willy Kambwandira said he was not surprised by the revelations.

“We are not shocked by these emerging revelations that the K 8 billion Medf loans only benefitted a certain section of former ruling party loyalists. The administration of this loan facility did not follow the law; oversight bodies such as Parliament were bypassed in the administration of the loan. The disbursement of the loan was done in secrecy. Precisely, there was no transparency in the recruitment of beneficiaries,” he said.

Kambwandira then called upon oversight bodies to rise to the occasion to playful their rightful roles in monitoring disbursement of government loans.

“It is clear that management of Medf loans was left in the hands of politicians. We call upon investigating agencies to swiftly act on the matter, and that those involved should be held accountable. The country needs to know people who benefitted from these loans. It is sad that these revelations come hot on the heels that Medf failed to recover MK 8.9 billion worth of loans that were issued by then Mardef [Malawi Rural Development Fund],” Kambwandira said.

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