The Reserve Bank of Zimbabwe has appointed an eight-member board to run the affairs of the Zimbabwe Asset Management Corporation. The board is chaired by veteran stockbroker Mr Bart Mswaka. Other board members include Mr Ritesh Arnand, Mr John Psillos and Mr Richard Muirimi while some are from the RBZ. A fully fledged secretariat which is responsible for handling all operational issues has started work and has put in place policies and procedures manuals covering its various operational areas.
Zamco was established to acquire non-performing loans from banks in a bid to strengthen their balance sheets.
The Zimbabwean banking system faces systemic risk owing to high levels of non-performing loans.
Such a situation has a spillover effect on the entire economy, with only the largest corporate borrowers able to access credit, and even then at unaffordable interest rates.
Zamco follows similar NPL asset management in countries such as South Korea, Nigeria, Indonesia and Malaysia.
The RBZ said the purchase of the bad loans will be done in phases com- mencing with loans in the Loss (E) category.
“Zamco has commenced the initial steps in the NPL acquisition process, i.e. the gathering of specific information about each NPL including details of loan balances, associated derivatives, property and other assets pledged as security as well as any legal issues associated with the NPL or underlying security.
“This process will result in the portfolio of NPLs held by banks to be placed into appropriate clusters/baskets for easier valuation and subsequent acquisition,” said RBZ Govenor Dr John Mangudya.
Zamco will also work hand-in-hand with approved management companies/investment advisors.
“In that regard, the corporation has put in place an accreditation framework which will be used to accredit/licence asset management companies/investment advisors wishing to be engaged by Zamco.”
Recently Mr Tichaendepi Masaya, who was Deputy Minister of State for Finance (1988-1995), said Zamco will not serve its purpose unless it is liquid enough to pay the banks immediately.
Mr Masaya, now Acting Dean of Social Studies at the University of Zimbabwe, said Zamco needs to be liquid enough to buy the bad books though at a discounted rate and this could be done through an international line of credit.
Dr Mangudya said to date $60 million has gone through Zamco while its full establishment is progressing well with the appointment of the board.