BY MBONO MDLULI
MBABANE – The Youth Enterprise Revolving Fund (YERF) is concerned about the members of Eswatini youth who have benefitted from the fund and fail to pay back their loans.
Because of this, the parastatal is calling upon the youth to approach its offices, with an intention to find solutions to the problems they may be facing. According to YERF, the youth does not just fail to pay back their loans, but they then engage on disappearing tactics, making it difficult for them to be helped where necessary.
According to YERF Marketing and Communications Officer Sihlangu Jele, in recent years, the YERF has made significant strides in empowering young entrepreneurs in Eswatini. Despite these efforts, a troubling trend has emerged among some beneficiaries: a pattern of loan defaults and delinquency that not only jeopardized their personal and business aspirations, but also undermined the sustainability of the Fund designed to support them.
According to Jele, many young entrepreneurs are opting to avoid communication with the Fund, choosing instead to evade their responsibilities. This behaviour has manifested in several ways: failing to answer calls, closing and changing bank accounts without notice, and, in some cases, simply disappearing. Such actions raise serious questions about the business culture and training these youths have received.
This culture of avoidance does not just impact the Fund; it ultimately affects the entrepreneurs themselves, according to Jele. The repercussions of neglecting their responsibilities can lead to dire consequences in their personal lives as well as their business journeys. When entrepreneurs disengage from their obligations, they put at risk not only their current ventures but also their ability to access future funding.
Jele said the challenges faced by the Youth Enterprise Revolving Fund are significant. As loan defaults increase, the Fund’s reserves become depleted. This lack of financial health makes it challenging to support other aspiring youth entrepreneurs in the future. The revolving nature of the Fund is at risk—without repayments, there is no capital to lend to the next generation of young business leaders.
Moreover, high levels of non-performing loans constrain the Fund’s strategies for growth and resource mobilization. Partnerships with private sector entities and opportunities for co-financing with traditional banks, microfinance institutions, and investors are compromised. This stagnation limits the potential for expanding the Fund’s impact, leaving many youths with unfulfilled dreams of entrepreneurship.
Jele stated that in light of these challenges, the Fund has implemented several strategies aimed at improving loan collection and supporting entrepreneurs in distress:
- Vigorous Follow-Ups: Active communication with defaulters to understand their challenges and facilitate repayment.
- Asset Surrender Requests: Encouraging defaulters to voluntarily surrender funded assets if they cannot maintain their business commitments.
- Loan Rescheduling and Restructuring: Offering flexible repayment periods and terms to accommodate the financial realities of struggling entrepreneurs.
- Blacklisting Measures: Enforcing a system that prevents defaulters from obtaining loans from other financial institutions unless they address their arrears.
- Legal Action: As a last resort, initiating legal proceedings to reclaim funds owed and repossess assets.
Jele said despite these measures, the desired results have not been achieved. Many entrepreneurs continue to shy away from open communication and negotiations, perpetuating the cycle of delinquency.
He said his company’s doors remained open to all youth entrepreneurs who were defaulting or struggling with their businesses, stating that the Fund extended an invitation: “Come and talk to us. We are willing to listen and work collaboratively towards solutions that can benefit everyone involved,” Jele said.
He advised the youth that entrepreneurship, especially amid high unemployment rates, is not merely an option—it is a vital way of life. Supporting young people in building sustainable and profitable businesses will enable them to fulfil their obligations while fostering economic growth in our country.
He said Eswatini Government believed in the potential of its youth. “With the right support and frameworks in place, we can harness the demographic dividends of our youthful population. Policies are being reviewed to enhance the entrepreneurship ecosystem, facilitate business operations, and create new market opportunities—both domestically and internationally,” he said.
Jele reminded the nation that during the launch of the Loan Repayment Campaign on 19 December 2024, on his speech, Minister of Sports, Culture & Youth Affairs Bongani Nzima mentioned that “The Government is deeply committed to fostering this entrepreneurial spirit among our young people. Numerous initiatives have been put in place to support youth entrepreneurship and small business development. We understand that access to capital is crucial, which is why programs like the Youth Enterprise Revolving Fund were established.”
