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NPLs decline

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THE non-performing loans (NPLs) have been further reduced to 15% by the end of the first quarter of the year and the banking sector has submitted $383 million bad loans to Zimbabwe Asset Management Company (Zamco), an official has said.

BY VICTORIA MTOMBA

Central bank governor John Mangudya told NewsDay Business that the total bank deposits as of the end of the first quarter stood at $5,2 billion.

“NPLs were 15% as at the end of March as some of the loans in the sector had been restructured. Seventeen banks in the banking sector have given Zamco their loans amounting to $383 million and Zamco is qualifying the loans so that disbursements can be done on a case by case basis,” Mangudya said.

The average NPLs to total loans ratio stood at 16% as at December 31 2014. This means that for every $1 that is borrowed, 15c would not be recovered.
He said Zamco was an important tool for the restructuring of NPLs in the banking sector to avoid company closures.

An NPL is the sum of borrowed money upon which the debtor has not made his or her scheduled payments for at least 90 days.

The country witnessed economic growth between 2009 and 2013 after the introduction of the multi-currency system due to the loans that were channelled to the various sectors of the economy.

These loans are no longer available at the rate they were during the five-year period which has resulted in the credit crunch in the country. As a result, the banking sector is now conservative in their lending to avoid increasing the bad debts.

Between 2009 and 2013, the country saw NPLs increasing from zero to 20% in September 2014.
“We are saying quid pro quo banks should revise their banking charges to ensure that companies continue to survive as their (banks) survival depends on the customers,” he said.

He said the special purpose vehicle, Zamco, was providing relief to banks as well as the interbank facility.

The central bank introduced the interbank facility in March and it has nine banks using the facility and there is $100 million interbank Aftrades.

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