Building a future with decent work for youth

Microfinance Partners

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Skills Youth Fund

The Zimbabwe financial sector is still experiencing serious problems, including liquidity, non-performing loans and poor corporate governance vulnerabilities. Some banks are also failing to pay their statutory reserves while others are heavily exposed to industry failure. The majority of Microfinance Institutions, Savings and Credit Cooperatives and Self-help groups collapsed with the introduction of the new multi-currency system without any conversion from the abandoned Zimbabwean dollar. As demand for funds across the whole economy continues to outweigh supply, interest rates are currently very high, at around 12% or worse for those without collateral, making borrowed money very expensive. This dampens and weighs heavily on growth and poverty reduction prospects.

The Challenge Fund for youth in the rural and informal economy enables youths and craftpersons who normally lack collateral security to access credit and related services from financial service providers such as Microfinance Institutions and Banks. It is also in part a grant scheme helping skilled youth savings and credit cooperatives and self-help groups to regenerate.

The first objective of the Fund is to make microfinance markets work for youth by facilitating post training access to group and individual business loans for youth seeking self employment under the TREE and QIA projects. The second objective is to assist Craftpersons to access markets, working capital, appropriate tools and improve their work practices for better business which in-turn creates demand driven informal apprenticeship and wage employment opportunities for youth in the formal economy.