Financial management education key to checking rate of loan defaults by beneficiaries —Group

Government has been advised to initiate a deliberate policy that seeks to educate loan beneficiaries on financial management.

The call was made on Friday by FinGen Money Genius Group.

President Hakainde Hichilema had announced that 77,000 micro small and medium enterprises were supported through various government loan facilities during his address to Parliament last Friday.

Group Communications Officer, Patrick Chipandwe, in a statement issued in Lusaka on Friday said the policy would help to prevent the high default rate being reported.

Chipandwe said loan defaults was now turning into a culture and must be checked by ensuring that there was proper monitoring and evaluation.

He said this was to ensure that beneficiaries of Constituency Development Fund (CDF) and Citizens Economic Empowerment Commission (CEEC) were deploying the money in the right areas and what it was intended for.

“Additionally, the monitoring and evaluation would also ensure that beneficiaries pay back the loans on time thereby reducing high default rate,” Chipandwe said.

He added that the attitude of entitlement was discouraging banks from investing in the informal sector as they considered that particular market as risky.

“We commend government’s effort in accelerating the growth of viable small and medium enterprises through increased access to finance for small and medium enterprises through the CEEC and the enhanced CDF, as well as the Zambia Credit Guarantee Scheme,” Chipandwe said.

He expressed regret that the majority of Zambians had entitlement attitude towards government loan facilities leading to the abuse of government’s kind gestures.

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