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Tinashe Makichi :Business Reporter
CABS Holdings is considering offloading some of its bad loans to the Zimbabwe Asset Management Company (ZAMCO) but the financial institution’s primary focus is on managing its debtors, an official has said.CABS Holdings’ which is a banking subsidiary of Old Mutual Zimbabwe is one of the financial institutions that had not yet shelved bad loans to the asset management company according to OMZ chief executive Jonas Mushosho. ZAMCO was created by the Reserve Bank of Zimbabwe in August 2014 to take over non-performing loans from banks.
“We think that Non-Performing Loans at CABS are not consistent with the trend in the economy, but if we find that there are specific loans where it makes sense for us to hive them off to ZAMCO we will not hesitate to do that,” said Mr Mushosho.
The RBZ through ZAMCO has been releasing companies from the clutches of vicious debt traps by cleaning toxic debts from several banks’ balance sheets.
It is widely expected that cleaning the balance sheet of affected banks will help them play their intermediary role in the economy. A number of countries such as Malaysia, Nigeria, Kuwait, Taiwan and Ireland have created Special Purpose Vehicles that acquire bad loans to free companies’ balance sheets.
Online Reporter