BAZ concerned about high rate of non-performing loans

Harare, (New Ziana)-The Bankers Association of Zimbabwe (BAZ) has expressed concern about the high number of non-performing loans, saying many citizens have become bad debtors.

Statistics from the Reserve Bank of Zimbabwe show that in 2023 the banking sector asset quality remained satisfactory, as reflected by aggregate non-performing loans to total loans ratio (NPL) of 3.62 percent as of 30 June 2023, up from 3.30 percent as of 31 March 2023.

The ratio, however, remained within the acceptable international threshold of five percent.

Analysts, however, said it is worth noting that the figure experienced a notable increase from 0.3 percent in 2020, indicating a growing concern regarding the quality of assets, influenced by factors such as reduced United States dollar cash flows for servicing foreign exchange loans, a shrinking loan book in real terms, thin liquidity and relatively high interest rates.

According to the central bank, the agriculture sector had the largest value of non-performing loans at 67.68 percent, while individual loans stood at 9.32 percent of non-paid loans.

BAZ president Lawrence Nyazema said women have proved to be better debtors compared to men in terms of repaying loans.

“When it comes to women from our experience as banks; most women honour their obligations. In terms of their credit history, it’s exemplary. If I was to motivate our industry, I would say let us prioritize our women.

Most of their loans go towards ensuring that school fees for our brothers and sisters are paid, a home is created for the family and very little goes to waste,” he said.

New Ziana