The Malawi Enterprise Development Fund (Medf) has said it has so far disbursed K650 million of the K15 billion funds set aside to offer loans to small and medium enterprises (SMEs) as one way of minimizing the impact of Covid 19.
She observed that apart from the groups, they have also trained about 1,346 individuals.
“Talking of applications, we have received applications for about K4.4 billion which we are processing,” Mangulenje said.
Medf recently told the Budget and Finance Committee of Parliament that it will not be able to recover about K8.9 billion worth of loans issued by its predecessor Malawi Rural Enterprise Development Fund (Mardef).
Mangulenje said funds went into ghost borrowers because of a collapse of systems and processes.
“If you don’t have systems and processes then you are likely to have problems because everything goes haywire. It has been difficult really to trace some of those clients under those figures that we mentioned. We can’t lie because those things are even in our external audit reports, those matters were raised over a period of time. But these happened under Mardef, not Medf.
“We have devised new systems, procedures and processes to disburse loans and we are complying 100 percent with the regulatory requirements by the Reserve Bank because we are licences and heavily regulated. At the same time, we have improved operational efficiency. That’s why even our performance has been transformed from a loss making to now making profits,” Mangulenje said.
Budget and Finance Committee Chairperson, Sosten Gwengwe, recently urged Medf to be extra careful when extending loans to Malawians to avoid a repeat of the Mardef scenario.