In Summary
Speaking when she visited Mwananchi Communications Limited (MCL) offices this morning, Ms Mzee said clients’ ability to repay the loans was improving and that by next year, everything will be fine again.
Dar es Salaam. The new Ecobank Tanzania managing director, Ms Mwanahiba Mzee, has said that the high levels of Non Performing Loans (NPLs) in commercial banks will become a thing of the past next year.
Speaking when she visited Mwananchi Communications Limited (MCL) offices this morning, Ms Mzee said clients’ ability to repay the loans was improving and that by next year, everything will be fine again.
This comes against the backdrop of poor performance of commercial banks last year as they grappled with high NPL levels, precipitated by clients’ failure to repay them in the wake of a change in the management of the economy.
She however warned the sector to be keen with lending risk sectors, citing the example of agriculture.
Agriculture, she said, required closed supervision as farmers lack capacity in terms of skills, have bad absorption capacity and no tangible security.
“It is high time we followed-ups on our customers to find out if the loans are used as intended, if we are to reduce NPLs,” said Ms Mzee, who came into position in July this year.
Advising: “It is good to support the sector by dealing with farmers’ associations and not individuals on the grounds that it is easier to follow-up on the former than the later.”
The sector depended very much on weather and thus it carries higher risks than any other industry and it is difficult for banks to finance due to poor performance, according to analysts.
Analysts are of the view that the government should de-risk agriculture by creating reliable markets, of which would in turn allay fears to investors interested in the sector, including the commercial banks.
The Citizen
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