16 Mar 2022

Repayment of loans by Youth Development Fund (YDF) beneficiaries is reportedly unsatisfactory with many failing to honour their loan obligations.

As of the year 2018/19, a total of five per cent was paid back from approximately P415 million disbursed.

Responding to a BOPA questionnaire on the fund’s loans repayment status, YDF Policy Specialist, Mr Keabetswe Lesiela said the target was to collect P4 million per year, but they have never reached it but for the year 2018/19.

He lamented that they had collected only P21.7 million of the close to P437 million that was projected as the loan component, since the fund’s inception in 2009 to 2019. 

Mr Lesiela however said there was hope as during the current financial year, P4.6 million had been collected , out of a target of P4 million annually (116 per cent). 

He attributed defaulting to some funded businesses being unable to generate sufficient funds to cover operational costs, adding that some funded entities were ailing due to undercapitalisation and under budgeting. 

Mr Lesiela said others were not operational; temporarily closed due to lack of operational space, high rentals, medical reasons, and other undisclosed reasons by the beneficiaries. 

He said other reasons for collapse were no production, no employees, and failure to penetrate the market. The policy specialist stated that they adopted different grace periods of six and 12 months for non-agricultural projects/services and for dryland farming respectively, whilst for small stock and piggery the grace period ranged between 18 and 36 months. 

Meanwhile, Mr Lesiela said the Ministry of Youth, Sport, and Culture (MYSC) often conducted loan repayment campaigns and also used other platforms such as MYSC Facebook as well as bulk SMS to sensitise the beneficiaries on loan repayment. 

He said periodically, the ministry undertook racer studies to gauge the performance of YDF businesses and formulated strategic interventions, adding however that thus far, there were no plans to engage loan collection agents. 

Mr Lesiela also said there was no interest charged on outstanding payments. Ends