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Oliver Kazunga, Senior Business Reporter
THE Affirmative Action Group (AAG) is set to establish a conflict resolution centre to assist the group’s members with advice on how to represent themselves in the courts when their businesses face litigation.

AAG national vice president Mr Sam Ncube told Business Chronicle yesterday that the conflict resolution centre had been mooted following realisation that some of their members facing litigation had not received fair legal representation.

“On January 20, we will be launching the conflict resolution centre meant to assist our members secure advice on how they can represent themselves in courts if faced with legal matters like litigation.

“Of late, we have realised that some businesses who are our members, despite having sought the services of some lawyers,  have lost houses due to litigation for failing to service loans that were acquired at exorbitant rates when the country dollarised in 2009,” he said.

“Some of the lawyers that they have engaged are unscrupulous to the extent that they have connived with the creditors’ lawyers resulting in our members losing properties, which to some extent they were not supposed to lose.”

Mr Ncube said their conflict resolution centre would have two former judges and one former magistrate who will assist AAG members with advice on how to represent themselves in the courts.

In the past, AAG has blocked the auctioning of residential properties for businesses over unpaid debts.

Mr Ncube said in 2016, the AAG managed to save about 30 houses from going under the hammer.

“In recent years, the AAG has been known for activism and blocking of the auctioning of residential properties belonging to businesspeople attached over debts their businesses would have failed to repay. But now we have decided to take the legal route by establishing the conflict resolution centre which our former and current members can approach for advice on how to handle litigation matters in courts.

“When the country dollarised in February 2009, the economy was characterised by high lending rates that were as high as 40 percent which most borrowers have failed to service resulting in them facing litigation,” he said.

At present, the financial sector is charging interest on loans ranging between 12 percent and 18 percent while the Reserve Bank of Zimbabwe has directed the financial services sector to reduce interest rates to single digit levels.

The monetary authority is on record as saying banks thrive when businesses are both willing and able to timely repay their loans, which has not been the case since the introduction of a multicurrency system in February 2009.

The punitive interest rates have also been blamed for the high prevalence of non-performing loans as they have made it difficult for companies to repay.

This saw the central bank in 2014 forming the Zimbabwe Asset Management Company (Zamco), a Special Purpose Vehicle meant to takeover secured debt to free bank balance sheets.

To date, Zamco has absorbed over $500 million of the $750 million non-performing loans.

@okazunga