$10 million boost for youth empowerment bank

THE Government has committed an additional $10 million to capitalise the Empower Bank, a youth-aligned microfinance institution established to assist young entrepreneurs get financial assistance.

Initially the Government had put $2,5 million into the bank, allowing it to register as credit only microfinance institution. Youth, Indigenisation and Economic Empowerment Minister Cde Patrick Zhuwao said the $10 million additional funding will allow the bank to transform into a deposit taking financial institution.

“We have received seed funding to the tune of $2,5 million from the Ministry of Finance which has allowed Empower Bank to be registered as a credit only microfinance institution. The Minister of Finance (Patrick Chinamasa) has also indicated that he will be making available an additional $10 million, so that we can then move into a stage where it is a deposit taking micro finance,” he said.

Cde Zhuwao said transforming the institution into a deposit taking bank will help facilitate financial inclusion among the youths as there will be a record of their transactions as proof of their credit worthiness.

“One of the best ways of ensuring that a young person is financially included is to be have a record of their transaction in terms of how much money they are able to generate and how much money they are able to bank,” he said.

Cde Zhuwao also revealed that his ministry was engaged in talks with other financial institutions to partner the Empower Bank as part of efforts to enhance financial inclusion of young entrepreneurs.

“We are also talking to a number of institutions that want to support young people but have not had the institutional framework to do so. So far we have about four institutions that have agreed to partner Empower Bank, where Empower Bank effectively manages and disburses the amounts of money that they have to the young people. Some of them are Community Share Ownership Trusts and some of them are specialist funds for special programmes,” he said.

Cde Zhuwao said his ministry has come up with a framework that will allow financial services institutions to interact with young entrepreneurs and assist them capitalise their business ventures. He said the three staged framework was mooted after recognising that a lot of financial service institutions were not able to reach all the young people in the country.

“That framework involves, firstly identifying young people that are involved in economic activity and then up-skilling and upgrading those young people at an individual level. Secondly, strengthening the linkages that those young people and their enterprises have with the wider business community in such a way that they are fully integrated into the business ecosystems. Then thirdly, then being able to facilitate and assist young people to be able to get financial inclusion,” he said.

Cde Zhuwao said to that end, his ministry had established an institution called Zimbabwe Champions and Heroes of the Economic Empowerment Revolution (ZimCheer) whose main purpose was entrepreneurial development.

He said ZimCheer had so far identified 39 385 young entrepreneurs who will be pioneer beneficiaries of financial assistance from Empower Bank.

“Those young entrepreneurs have created 93 682 jobs and what we are now doing is strengthening their linkages both horizontally and vertically within the wider business ecosystem that they are in, in preparation for allowing them the opportunity to engage with financial services institutions better,” he said.