THE Government’s creation of the Citizens Economic Empowerment Commission (CEEC) fund facility to enhance entrepreneurship among
Zambians was well-intended because the move would help to mitigate the rising levels of poverty in the country.
This was also meant to help create employment opportunities through the empowerment of women and thousands of unemployed youths.
Apart from that, it was envisaged that the availability of CEEC funds would help to develop strong value chain clusters in the country through projects in agriculture, aquaculture, tourism, timber and food processing.
These projects would, in addition, create various market linkages and broaden the Government’s tax base.
The Small and Medium Scale Enterprises (SMEs) to which these funds were intended are high drivers of economic transformation and growth in any given economic set-up.
This is why the Government has been committed to the sourcing of taxpayers’ money to improve the economic status of its citizens.
While this has been lauded as the best approach to economic development with huge resources being poured into the venture, it seems that some recipients have not followed the guidelines in as far as loan repayments are concerned.
This is an issue that is threatening the Government’s good intentions because of lack of seriousness by some entrepreneurs in paying back the loans advanced to them.
Latest reports from the CEEC indicate that debt recovery as at the end of 2014 has tremendously declined to K11.9 million from K19.8 million in 2013.
This was out of the targeted recovery of K20 million, and the drop represents a 50 per cent loss.
According to CEEC head of communication and public relations Glenda Musebe, failure to hit the target was due to a number of factors such as a limited number of debt collectors.
Ms Musebe also attributes this to the lack of awareness among beneficiaries who thought the loans were free.
This is despite the fact that CEEC had in 2013 signed a Memorandum of Understanding (MoU) with at least six financial institutions aimed at strengthening the disbursement of funds, as well as the debt collection capacity.
The matter at hand is worth revisiting because no clear explanation has been advanced on what has led to the said financial institutions failing to meet the agreed target.
Secondly, there is need for CEEC to set up a strong unit to sensitise the masses, especially those in rural areas, through workshops and other means so that they can fully understand the importance of paying back the loans.
Merely increasing the number of debt collectors will not realise the desired results in the absence of sensitisation.
While CEEC has now introduced pre- financing training as a way of improving debt collection, this should have been the first priority
before such funds were disbursed to avoid lapses in the recovery process.
The other issue could be that there has been no proper or, better still, a strong monitoring system that could have been cross-checking activities among beneficiaries of the loans.
CEEC would be able to know through the monitoring system if approved projects have indeed taken off or natural occurrences such as death had taken toll on some of the beneficiaries that has led to the non-recovery of debts.
If these and other measures are not immediately put in place, CEEC will continue to face the same challenges in the recovery of loans over and over again, causing the Government to lose out.
It should also be emphasised that the CEEC loan facility is a great idea which will assist in value-addition to the locally available raw materials, create employment opportunities and market linkages as well as alleviation of poverty, especially among the rural population.
While the Government should be commended for the facility, the challenge is on CEEC who should ensure that a strong mechanism is put in place for tracking the loan repayment rate and see to it that recipients fully understand the importance of paying back the loans on time.