NEEF plans to recover MK6.4bn from defaulters in 6 months


National Economic Empowerment Fund (NEEF) Limited has given itself a target of six months beginning June to December this year to recover about K6.4 billion loans.

The loans were part of the MK8 billion chunk which the Malawi Enterprise Development Fund (Medf) disbursed nationwide prior to the fresh 2020 election.

But since the government in September 2020 rebranded Medf to NEEF, the Microfinance Institution has embarked on the loans recovery campaign and so far only K400 million has been collected representing about a 5 percent recovery rate.

Neef Acting Chief Executive Officer, Humphrey Mdyetseni, while admitting that the process is dragging, expressed hope that the set target will be met arguing that the beneficiaries have already shown interest to repay the loans.

Mdyetseni also said his organisation has put in place incentives like removal of default penalties, consideration of loan facilities to those that will reimburse 50 percent and 100 percent as some of the conditions that will ignite their interest among defaulters to repay the loan.

He made the remarks on Thursday in Mzuzu during the awareness meeting for the youth network leaders from the Northern Region.

“The current NEEF loans are being collected very well. We have an over 90 percent recovery rate as it stands to date. The loans with which we have problems are the ones disbursed by the defunct Medf in May and June last year whose recovery rate remains below 10 percent. But that notwithstanding, we have put in place measures to fast track the collection process, and one of them is the engagements with those that took the loans to commit themselves to pay these old loans.  

There is good reception from those that took the loans because their biggest complaint was that they were not approached to start repaying, and they were not given the modalities or procedures through which to repay the loans. We have agreed with them to commit themselves to do so through this period so that they also became eligible for subsequent loans which Neef is going to be disbursing from now forward,” Mdyetseni said.

He then urged the youth network leaders to reach out to their fellow youth network members for purposes of drumming up the participation of the youths in the Neef programmes to attain a high absorption rate of funds.

“According to the budget that was presented by the Minister of Finance [Felix Mlusu] we were supposed to disburse as much as K40 billion, but we are way behind that target because of other structural challenges which we had experienced. We expect that come 30 June we could disburse as much as K10 billion and so far to date we have reached out to as many as over 30, 000 Malawians with loans. We are not satisfied and hope our target of 100, 000 could be reached by 31st March next year,” he said. 

Director of Youth in the Ministry of Youth and Sports, Judith Msosa, claimed her ministry sanctioned the sensitization meetings which will be held nationally in order to encourage more youths to access Neef loans.

In his remarks, Project Officer at Youth and Society, Dalitso Magelegele, thanked Neef for working with various stakeholders observing the move will help to increase the loan absorption rate.

“Since Neef has indicated will continue working with stakeholders such as Malawi Posts Corporation, the district youth offices, the national youth council, and other stakeholders, it remains our hope at the end of the day that young people will benefit from this loan facility by enhancing that collaboration,” said Magelegele.

Since February 2021, Neef has disbursed K8.1 billion to 3,336 groups with women groups leading at 57 percent followed by the youth at 24 percent, small, micro and medium are third with 17 percent while individuals are at 2 percent.