by Mwana Bwalya, Zambia, April 1997
THEME = SOCIAL ACTION
Soon a "Mishanga seller" (cigarette seller) or any young woman selling fritters on street corners will be able to obtain a loan to expand his or her business. All this, thanks to the Commonwealth Credit Initiative (CCI), launched in Lusaka towards the end of 1996.
"We want young people selling tomatoes on the streets to benefit from the scheme", says a Commonwealth Youth Programme - Africa Centre (CYP) official. "These people are capable of doing something much more productive, and the loans scheme has come at just the right time".
The CCI is an initiative of the Commonwealth Office in London, which has earmarked over Kwacha 150 million for the project in Zambia. (Editor's note: In June, one US dollar = 1300 Kwacha). The CYP and the National Savings and Credit Bank (NSCB) operate as implementing agencies. The money is given to the NSCB through the CYP. The NSCP then gives the money out in the form of loans to young entrepreneurs and businesspeople who, according to the Pan-African Commonwealth definition, are aged between 15-29.
Lusaka was chosen for the project, because it's easy to check on how those young people receiving loans from the CCI, are using the money. Also, the CYP and the NSCB have their head offices in the capital.
The NSCB has already been given the first instalment of about K55 million. It is being distributed through the bank's Chawama, Chilenje and Matero branches where the scheme is being implemented. Pan-African Commonwealth office consultant, Dr.Mary Muchena, who has recently been in Zambia to assess the CCI's progress, said that further amounts will be released in each of the remaining two years of the project. "If we see the project is successful, it could be that it will continued", she said. "So far, it has started on a promising note in Zambia".
Four countries in various parts of the world are involved in the project. Africa - Zambia; Asia - India; South Pacific - Solomon Islands; Latin America - Guyana. It is basically a three-year project, at the end of which, as far as Zambia is concerned, some 300 young Zambians will have been financially assisted.
Qualification for credit is simple. NSCB's project officer, Stanley Ng'andu, says prospective beneficiaries should fall into the 15-29 age bracket. It doesn't matter if they already have a small business or not. They should organise themselves into groups of five, draw up a constitution, select a chairman and secretary. Then they can apply to the nearest NSCB branch, whose officers attached to the project, will scrutinise the application. Once accepted, the members will be trained at various CYP offices by experts from the International Labour Organisation.
"This is not skills training", says Ng'andu, "but merely basic training in business management; instruction on how to draw up business plans; identifying costs and keeping records".
Those who take out a loan, agree on a time limit with the NSCB before starting to repay the loan, but it all has to be paid back within six months or earlier. To become a member, you have to register in groups of five. Generally speaking, two members at a time from each group are given loans. When this has been repaid, the next two get theirs, and after repayment, the fifth member can borrow. This means that if the first borrowers take too long in repaying the money, others won't be able to borrow.
The first three-day training course was conducted last December at the CYP offices in Lusaka. So far, nine of those who followed the course have been given loans amounting to K7.2 million, while another K10 million is due to be distributed next month.
Pastor Ricky Mushipi is a Chawama resident, and he makes mattresses. He was given a K1 million loan. Then there's Wellington Makangu, a photographer, also from Chawama. He received K600,000, of which K500,000 was used to buy a new camera. James Mushota is a carpenter and he comes from Matero township. He was loaned K950,000. He explains: "The loan has helped me a lot. "The training was particularly superb because it enabled me to understand how to keep records. It also introduced me to project costing, marketing strategy and how to run a business profitably".
Mushota says he makes about K250,000 profit per month and feels he can pay back the loan in six months. He admitted that business is bad. "Sometimes you go for days without selling anything, yet I have to pay those I work with, and still have enough to keep my family".
The CCI Project has been praised by many Lusaka residents. "It is not discriminatory like other programmes where one is asked for surety before being given a loan", says one resident. "In any case, how can you possibly raise surety when in the first place you have no money to provide it?"
Dr.Muchena said she was impressed by what she had seen during her visit. However, she felt that the young entrepreneurs could improve on the quality of some of their products, on their business management, and on the standards of safety in their work places. She observed that it would be much better if those presently operating from home found other places to set up their workshops.
END