EmpowerBank to grow funding for youths
EMPOWERBANK intends to grow funding towards youths in farming through its “tobacco youth business starter pack programme” during the forthcoming 2022-23 farming season, according to the financial institutions' chief executive, Mr Shadreck Mhembere.
The bank's MicroFinance Institution (MFI) last year assisted over 160 youths with funding for tobacco production on varying land sizes and intends to expand the scheme.
Tobacco is a key foreign currency earner in Zimbabwe and EmpowerBank aims to improve production capacity of the crop through the initiative.
EmpowerBank was established with the resolve of providing financial solutions to the financially excluded population with greater focus on the youths.
Hitherto the microfinance institution has managed to approve loan applications from a number of sectors of the economy, but mainly dominated by agriculture given less sophistication of agribusiness.
The other significant chunk of loans has been disbursed to youths in small to medium ventures encompassing transport, distribution and retail sectors.
“Last year we had a pilot tobacco finance project where we targeted to finance 164 youth farmers. This year through the youth business starter pack, we are hoping to expand the number going into 2022-23 farming season.
“The youths are coming from across the board, the big number is from the agriculture sector because it is a quick win sector and barriers to entry are very limited,” said Mr Mhembere.
The bank strives to empower marginalised communities, small businesses to upscale through wealth creation projects and to generate better employment opportunities.
Mhembere said the number of loan applications and payouts have improved compared to the days of the bank's inception.
He said initial monthly interest rates of between 10-15 percent per month deterred loan seekers, a position he said had since improved as the bank last year — introduced the youth business startup scheme which offer loans at concessional interests rates 5 percent below commercial banks.
“We have now seen a lot of young people coming to access money because it is now fairly priced,” he said.
Worryingly, Mr Mhembere said women continue to be less represented when it comes to loan seekers, a position he anticipates to change for the better.
“We try to balance between male and female, but generally, we are finding that women's number is slightly lower, we target 50-50 allocation of loans, but as it stands, the ratio is around 60:40 majority being men.”
Youth entrepreneur specialising in horticulture, Mr Jacob Ruvise, lauded EmpowerBank's support towards youth businesses, saying funding was a key factor in coming up with a successful venture as operations.
He said agriculture, in particular, demands adequate funding to have requisite inputs and labour.
“Funding is a critical factor in up-scaling youth driven enterprises, but banks need to be considerate when it comes to funding youth-owned businesses, many have good ideas, but they have suffered stillbirth given the inability to access funding due to banks prohibitive requirements,” said Mr Ruvise.
The bank's loan applications and distribution have mainly been dominated by youths from Harare and Bulawayo given that the bank first launched its services in Harare and Bulawayo back in June and December 2018 respectively.
EmpowerBank offers asset finance, guarantees and savings accounts, loans to youthled business including agriculture projects, cutting across urban, peri-urban and rural Zimbabwe.