Economic Exclusion 245. Economic exclusion manifests in the way in which the Local Initiative Investment Fund (LIIF) is operated. The fund, which was established in 2006 to support local investments that would generate employment and enhance food production, is made available to all 128 districts. Originally only amounting to 7 million meticais (US$290 000), it has since been increased to 9 million meticais (US$373 000), of which 2 million meticais are for the funding of local infrastructure projects and 7 million meticais are to be awarded as soft loans for local people’s projects. Each district has a District Consultative Council (DCC) that recommends who should receive such a soft loan. The council is dominated by FRELIMO members and the district administrator, who is the loan administrator, is a FRELIMO member. 246. In the CRM’s interactive sessions with stakeholders, many participants from all the provinces complained that the allocation of loans from the LIIF was not transparent, as there were no clear criteria other than that applicants should come up with projects capable of generating employment and enhancing food production. It was also established that most of the beneficiaries of the fund are FRELIMO members, as that party is generally supported by the way in which the fund is currently administered. FRELIMO members did not deny that they benefited the most and rationalised that non-extension of loans to RENAMO members was due to their alleged lack of capacity to design bankable projects worthy of funding. Social Exclusion 247. The LIIF is a major government intervention for alleviating poverty, hence the concern about the exclusion of a significant proportion of the population from accessing it. According to government officials, the fund is making a huge impact in improving people’s livelihoods. In Sofala province, for example, the LIIF had contributed to the creation of over 7 000 jobs. In all 12 districts of the province, however, it was very difficult to persuade beneficiaries to repay the soft loans. In 2007, only 173 000 meticais of the loan of 8.6 million meticais disbursed in the Bilene-Macia district had been repaid. Consequently, by the last quarter of 2008, only 3.7 million of the 8.6 million meticais had been disbursed. 248. In December 2008, the Minister of Planning and Development announced that the LIIF had financed 2 462 food production and 3 600 other projects that had created 20 000 permanent or seasonal jobs. However, he lamented the low repayment rate, which is estimated at 2.8 per cent. The LIIF’s huge impact is desirable and commendable but, from evidence available to the CRM from the validation workshops, is working only for a limited component of the population. The political considerations to qualify for access to the fund may be 102 A P R M COU N T RY R EV IEW R EP ORT NO. 11