The Zimbabwe Asset Management Corporation (ZAMCO) has acquired 1160 non-performing loans worth US$1,13 billion from financial institutions a process that has helped breathe life into the balance sheets of the affected institutions.
These revelations came out when Reserve Bank of Zimbabwe (RBZ) Governor, Dr John Mangudya was giving oral evidence to the Parliamentary Portfolio Committee on Public Accounts this Monday.
The Public Accounts Committee wanted to find out how the non-performing loans were acquired as well as the government’s debt to the central bank and if the transactions were above board.
In response, Dr Mangudya said all the transactions were done according to the provisions of the Reserve Bank Act.
Further probed on the constitutionality of the acquisition of non-performing loans, Dr Mangudya reminded the committee that the loans were contained in the two previous budget statements passed by the same parliament, some of which date back to the period when the current chairperson of the committee was still finance minister.
At the time of the loan acquisition in September 2014, the non-performing loans were choking the financial sector at 20.14% and as at 30 September 2018 they stood at 6.22% moving within the internationally accepted threshold of five percent.
A total of $251.46 million has been recovered as at 31 December 2018 either as cash or properties.
The committee adjourned to next week and requested the RBZ chief to provide details of the 1160 non-performing loans.