HARARE, February — The level of non-performing loans in Zimbabwe is this year seen rising to 25% from 15,92% as at December last year, as the economy teeters on the brink of deflation, an independent analyst has warned.
High levels of consumer borrowing would erode the profitability of weaker banks, said Washington Mehlomakulu, a consultant with Jack and Fields and Corporate Risk Advisory, with official statistics showing that individuals accounted for nearly a quarter of total credit extended by financial institutions.
“We are going to see more company failures in 2014 and deflation is going to be one of the most serious things that this economy has to deal with. We anticipate the average levels of nonperforming loans to reach 25 percent this year, largely driven by a fall in business activity,” Mehlomakulu told delegates attending a seminar organised by the Institute of Administration and Commerce. —The Source
