HomeEditorial CommentAuctions a symptom

Auctions a symptom

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THE number of Bulawayo businesspeople whose properties are being auctioned by banks to recover money advanced as loans is alarming.

As we report elsewhere, next week eight banks and micro finance companies would auction property including houses and buildings belonging to companies and individuals to recover an unspecified amount of money in bad loans.

The banks include CBZ, CABS, People’s Own Savings Bank (POSB), NMB Bank Limited, African Banking Corporation of Zimbabwe, ReNaissance Merchant Bank, ZB Bank, Kingdom Bank.

Such auctions occur as a last resort when financial institutions would have exhausted every other channel to recover their money.
The banks cannot be blamed for going that route because they have to protect their depositors.

However, the auctions are a sign of a deeper problem confronting the business sector in Bulawayo, but unfortunately the authorities do not seem to care.

Last year, properties worth millions of dollars were auctioned and this elicited an outcry from the Affirmative Action Group (AAG), which tried in vain to stop the sales. AAG appealed to the government to intervene, but up to now no response has been forthcoming.

Granted, the government is broke, but this does not preclude it from doing something to demonstrate it cares about the survival of the business sector in Bulawayo. Measures that the government has come up with in the past to save Bulawayo-based companies from collapse have never been pursued with vigour that everyone expects for a city in crisis.

Thousands of people have been thrown out of work by companies collapsing every day and the least the government could do is to come up with tailor-made solutions to the scourge.

During the lifespan of the inclusive government, the Distressed Industries and Marginalised Areas Fund (Dimaf) was launched in 2011 where the government and Old Mutual were supposed to contribute $20 million each for on-lending to struggling companies.

The government, we are told, is yet to fulfil its part of the bargain. There is no better way to illustrate the lack of seriousness from the authorities than the way Dimaf was handled.

Auctions further buttress the point that the government has no plans to salvage Bulawayo’s collapsing economy.

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