Farmers have improved repayment of loans to state owned financial concern, Agribank leading to a drop in the bank’s non-performing loan ratios to 13.81 percent from 21.14 percent two years ago.
In the past few years, Agribank has been owed millions of dollars by the farmers, industry and commerce, leading to the bank’s failure in fulfilling its mandate of developing the agriculture sector.
Figures seen by the ZBC News on Wednesday (today) indicate the bank’s non- performing loan (NPL) ratios have dropped to 13.81 percent from 21.14 percent in 2016 on the back of repayment of loans by clients mainly those that benefitted from the command agriculture programme with part of the debts being also written off.
The financial institution’s chief executive officer Mr Sam Malaba confirmed the bank is now targeting single digit non performing loan ratios by year end.
“We are really aware of what has been happening but this has been corrected and we are happy about efforts to ensure we reduce the loan book in the future as we seek to restore viability,” he said.
The government as the key shareholder is also expected to inject an additional $10 million as part of increasing the regulatory capital for the institution currently pegged at $54.9 million in line with an initiative to achieve a $100 million capital requirement for a tier 1 bank by December 2020.