Harare - The non-performing loans (NPL) ratio in Zimbabwe now stands at 20%, up from 17% in August, and will continue to grow if indiscipline in the financial services sector continues, said Reserve Bank of Zimbabwe (RBZ) governor John Mangudya.
Speaking at the inaugural Financial Sector Indaba in Harare, Mangudya said the continuous surge in NPLs is driven mainly by gross indiscipline by borrowers.
According to a report by Zimbabwe’s leading business news agency Financial Express, Mangudya said the NPL ratio now at 20% is likely to rise by December if nothing is done.
Traditionally, NPLs should be around 5%.
Meanwhile the RBZ has instituted the establishment of a special purpose vehicle, the Zimbabwe Asset Management Corporation (Zamco) to acquire NPLs from banks in a bid to strengthen their balance sheets.
READ: Zim sets up body to deal with bad debt
Mangudya said to date US$60m has gone through Zamco.
Speaking at the inaugural Financial Sector Indaba in Harare, Mangudya said the continuous surge in NPLs is driven mainly by gross indiscipline by borrowers.
According to a report by Zimbabwe’s leading business news agency Financial Express, Mangudya said the NPL ratio now at 20% is likely to rise by December if nothing is done.
Traditionally, NPLs should be around 5%.
Meanwhile the RBZ has instituted the establishment of a special purpose vehicle, the Zimbabwe Asset Management Corporation (Zamco) to acquire NPLs from banks in a bid to strengthen their balance sheets.
READ: Zim sets up body to deal with bad debt
Mangudya said to date US$60m has gone through Zamco.