National Economic Empowerment Fund (Neef) is investigating a syndicate which has infiltrated the loan scheme. 

Investigations indicate that some middlemen are soliciting commissions from unsuspecting beneficiaries and duped money.

This was detected in Dowa District where a Tilitonse Foundation-funded project is monitoring the implementation of the Affordable Inputs Programme (AIP) and the Neef loan scheme.

Kapasule: We want to take
appropriate action

In an interview, Neef spokesperson Whytone Kapasule said an Internal Audit and Risk Compliance Department is undertaking a thorough audit of the whole portfolio for Dowa to ascertain the magnitude of the problem.

He said the audit seeks to uncover other cases of similar nature for appropriate action to be taken.

Kapasule said: “We have followed up on the matter with the help of local civil society organisations in the area and managed to recover K900 000 from the suspects.

“We expect the case to go to court for the suspects to face the law and deter others.”

However, he said some beneficiaries themselves are to blame for letting fraudsters into the loan scheme.

“What makes this unfortunate is not only that these shrewd contrivers are taking advantage of the gullibility of our clients but also some clients are abetting this.

“They come to Neef, go through the whole application process such as endorsing the application with their national identity cards, open bank accounts and get the money through the bank without disclosing anything to us. After withdrawing the money, they take the money and share it with someone clandestinely,” he said.

Central Region Police spokesperson Harry Namwaza confirmed to have received complaints of fraud and said one of the cases will be heard in court on January 12 this year.

Some Neef beneficiaries in Dowa complained to Mponela Aids Information and Counselling Centre (Maicc) after being duped by the fraudsters, who pose as Neef middlemen.

In an interview, Maicc programmes manager George Kaunda said they reported the matter to Mponela Police.

“We come across so many fraud cases in Dowa where some politically connected individuals are cashing in on Neef,” he said.

Kaunda said in districts such as Karonga, Mzimba, Kasungu, Dowa, Lilongwe and Ntcheu, where a similar monitoring project is being implemented, they have uncovered similar practices where beneficiaries are having to pay money just to access the loans.

He said apart from fraudsters infiltrating the programme, there are also other challenges that have affected the politically-hyped loan initiative where some beneficiaries are getting loans without the required training.

According to Neef guidelines, beneficiaries are supposed to go through a week-long training to acquire skills in financial literacy and business management. 

The Tonse administration has allocated K75 billion under Neef to economically empower citizens. Previously, government had similar loans which were disbursed but never recovered.

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