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Harare - The Reserve Bank of Zimbabwe (RBZ), through a special purpose vehicle, has taken over bad loans worth US$207m from the local financial sector, a report showed.
According to the Quarterly Economic Review Report released by the RBZ, the Zimbabwe Asset Management Company (ZAMCO) purchased bad loans amounting to $207m as at September 30 2015.
More companies are set to benefit from ZAMCO, with Zimbabwe Stock Exchange-listed miner RioZim lining up loans worth $33.7m to be taken over by ZAMCO at an interest rate of 9% against 21% from local banks.
Cotton ginning company Cottco, with a debt overhang amounting to $56m, is also in the process of having its loans taken over by ZAMCO.
According to the RBZ, the move by ZAMCO, a special purpose company created by the central bank to take over non-performing loans from banks, will create a window for banks to resume new lending.
The RBZ says ZAMCO is only acquiring non-performing loans that are fully secured and which are not insider loans.
"ZAMCO would only acquire assets that banks took as security when they extended loans to clients.
“We are trying to clean the balance sheets of banks so that they can start afresh,” the RBZ said at the formation of ZAMCO early 2015.
The apex bank said addressing non-performing loans would help reduce the cost of funding in the economy.
Zimbabwe’s economy is suffering under tight liquidity conditions which have resulted in high interest rates and high non- performing loans.
Analysts say general economic hardship as well as high interest rates are some of the reasons for failure to pay back the loans.
According to the Quarterly Economic Review Report released by the RBZ, the Zimbabwe Asset Management Company (ZAMCO) purchased bad loans amounting to $207m as at September 30 2015.
More companies are set to benefit from ZAMCO, with Zimbabwe Stock Exchange-listed miner RioZim lining up loans worth $33.7m to be taken over by ZAMCO at an interest rate of 9% against 21% from local banks.
Cotton ginning company Cottco, with a debt overhang amounting to $56m, is also in the process of having its loans taken over by ZAMCO.
According to the RBZ, the move by ZAMCO, a special purpose company created by the central bank to take over non-performing loans from banks, will create a window for banks to resume new lending.
The RBZ says ZAMCO is only acquiring non-performing loans that are fully secured and which are not insider loans.
"ZAMCO would only acquire assets that banks took as security when they extended loans to clients.
“We are trying to clean the balance sheets of banks so that they can start afresh,” the RBZ said at the formation of ZAMCO early 2015.
The apex bank said addressing non-performing loans would help reduce the cost of funding in the economy.
Zimbabwe’s economy is suffering under tight liquidity conditions which have resulted in high interest rates and high non- performing loans.
Analysts say general economic hardship as well as high interest rates are some of the reasons for failure to pay back the loans.
