By Robert Tapfumaneyi
GOVERNMENT has introduced a 2.5% deduction from all members of the public service’s wages with the funds set to be directed towards a loan fund referred to as Government Employee Mutual Savings (GEMS) Fund.
This was announced Tuesday by the Public Service Commission.
The $75 million GMES was launched last weeks with government saying the move is set to improve the financial welfare of underpaid civil servants who will be eligible for flexible personal loans for their needs.
These include home improvements, property acquisition, livestock rearing, and school fees, among other benefits.
A nominal lending rate of 10 percent per annum has been set, with lending thresholds set to range from 10 to 15% per annum.
This would depend on the actual amount applied for and the desired repayment period.
“All members of the Public Service regardless of their category are going to receive a 2.5% deduction on their salary during the month of February 2021 and subsequently every month as admission to membership,” read the circular to government employees.
“After 3 months accrual of contribution, members desiring to access short term to medium term loans will apply through their Head Ministry.”
Short term lending rate is 10% per annum and medium term will range between 10 to 15% per annum.
Civil servants who do not wish to join GEMS will be refunded.
“Members who do not wish to join the scheme are free to advise the head of ministry in writing,” read the circular.
Ambassador Jonathan Wutawunashe, the PSC secretary said the revolving fund, was meant to cushion willing government employees.
“In cognisance of the need to cushion its workers and in preparation for a rainy day which can come for any one of us at any unexpected time, government has set up the Government Employees Mutual Savings (GEMS) Fund,” he said last week.
“This resource-pooling scheme is aimed at creating a revolving fund which civil servants, who voluntarily choose to participate in it, can access at their time of need at concessionary rates far below the prevailing market rates and way better than loan shark rates.”