Tanzania Central Bank Introduces New Measures to Reduce Non-performing Loans

FILE PHOTO: A man walks out of the Central Bank of Tanzania building in Dar es Salaam, Tanzania January 15, 2019. REUTERS/Emmanuel Herman

The Bank of Tanzania said it plans to target individuals and government officials with new measures to reduce non-performing loans.

Tanzania’s central bank is taking measures to stabilise the banking industry, including merging small banks with insufficient capital.

Tanzania’s non-performing loans stood at 9.36% of total loans in March, nearly double the recommended threshold of 5%. According to the ministry of finance, bad loans accounted for 10.50% of all loans in March 2020.

In a statement late on Sunday, the bank said its investigations had revealed some bank employees had been directly responsible “for issuing loans without following procedures, fraud/corruption, or other practices that were tantamount to lacking integrity”.

Your Friends Also Read:  Jumia shuts down travel department in Nigeria

The report stated that commercial banks would be compelled to take legal action against such employees, and the Tanzanian regulator would blacklist them and prevent them from working in the financial sector.

Government officials with non-performing loans have been ordered to notify their employers so that appropriate action can be taken.

“High rate of non-performing loans is among major causes of high lending rates and may lead to instability of the banking sector,” the statement issued by Governor Florens Luoga said.

According to the International Monetary Fund, nearly half of Tanzania’s 45 banks were vulnerable to adverse shocks and risk insolvency in the event of a global financial crisis in December 2018.

Your Friends Also Read:  Nigeria's 9PSB Appoints Branka Mracajac as CEO

All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from News Central TV.

Contact: digital@newscentral.ng


Leave a Reply

Previous Article

Registration for Presidential Candidates Begins Across Libya

Next Article

Egypt Records 65 COVID-19 Deaths, Highest in 7 Months

Related Posts