The Public Accounts committee has given Zimbabwe Asset Management Corporation (ZAMCO) a two week ultimatum to reveal names of all defaulters of Non Performing Loans assumed since the asset management company came into effect in 2014.
There are widespread allegations that some political bigwigs might have used their political muscle to manipulate ZAMCO’s existence as means to evade repayment of massive debts once ZAMCO assumed the NPLs.
ZAMCO is an asset management company owned by Government that was specifically set to morph out NPLs that had rocked the banking sector meant to minimize banks’ losses.
Parliamentary Public Accounts Committee chair, Tendai Biti today gave ZAMCO chief executive officer, Cosmas Kanhai two weeks to bring to the Committee names of defaulters and the banks whose loans were purchased by ZAMCO for scrutiny.
“There are allegations that some political bigwigs were going about borrowing without paying back and now hide behind ZAMCO to pay for them. Still on that issue in 2 weeks we expect you (zamco) to give us names of those persons whose loans you purchased, the name of bank, the interest rate and the tenure of the loan,” said Biti.
Since its inception, ZAMCO has resolved $ 250 million out of the total $ 1.13 billion worth of loans it purchased from banks which the Central Bank Governor Dr John Mangudya says the majority of these loans were issued by banks prior to 2013.
Biti said ZAMCO was not a bank hence was not protected by the Bank-customer privacy privilege and by virtue that the defaulters had failed to honor their debts with the concerned banks it was hence reasonable for banks to terminate the customer privacy privilege.
Analysts say the period in question perfectly resonates with the period when Government ran its Youth Empowerment Program which saw the majority of ZANU PF aligned youths receive loans that were seldom repaid.
The quantum of NPLs burgeoning on the country’s banking sector at the time is feared to have been even larger since ZAMCO could only purchase NPLs from distressed banks on willing-seller, willing-buyer basis.
“We could only purchase NPLs from banks that were willing to sell these NPLs to us. Remember ZAMCO can only buy these loans from banks that were willing to sell to us and not every bank was willing,”Kanhai told the committee.
In his 2019 National Budget Statement, Finance and Economic Development Minister, Prof Mthuli Ncube said ZAMCO was toxic and needed to be winded up, but ZAMCO has been previously given until 2025 to wind up its mandate.