Zamco assumes $100m bad loans

via Zamco assumes $100m bad loans – DailyNews Live 26 June 2015 by Kudzai Chawafambira

HARARE – Finance minister Patrick Chinamasa says the Zimbabwe Asset Management Company (Zamco) has so far taken nearly $100 million in bad loans from banks to help restore viability in the financial services sector.

Zamco — government’s special purpose vehicle to house non-performing loans (NPLs) created in August last year — was established so that it could take over the bad loans that were restricting banks from providing new loans.

“The Reserve Bank of Zimbabwe (RBZ), under this company, will not take over any loans which were recklessly given without appropriate security. Already, this company, in a very short period of time, two months, has already taken nearly $100 million from the loan book of financial institutions,” Chinamasa told Parliament on Wednesday.

In response to Mberengwa East legislator Makhosini Hlongwane’s question on government’s policy interventions modelled to deal with NPLs, Chinamasa further added that the stock of bad loans across all the banking institutions was around $750 million.

He noted that the implementation of Zamco’s strategy was “with a view to cleaning up the balance sheets of the commercial banks so that they are put in a state where they can confidently resume trading and lending”.