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Dr John Mangudya

Senior Business Reporter
MORE companies continue to lose properties over unpaid loans to local banks that have resorted to the legal route to recover their money from defaulters.

Given the prevailing depressed economic environment characterised by low consumer spending amid high production costs, the plight of defaulting firms has been compounded by property attachments by banks for cheap auction.

The development has given brisk business to estate agents and auctioneers who are now making a killing each week out of the companies’ misfortune.

Yesterday, Holland’s auctioneers, in a notice announced its move, sanctioned by the Sheriff of the High Court, to conduct a public auction next week Friday (March 13, 2015) to sell several properties owned by defaulting firms in Bulawayo.

Among the properties lined up for auction are those involving transactions such as Standard Chartered Bank versus Pyvate Investments, Cabs versus Sunrise Trading, Cabs versus Familiar Marketing, Premier Banking Corporation versus Merspin, Trust Bank versus Committed Investments and Another.

Others include MBCA Bank versus Suspension Centre, CBZ versus Upridge Trading, NMB versus Eyeland Trading, Tetrad Investments versus Daytona Beach Marketing, and CBZ versus the Zimbabwe Football Association and its chairman Cuthbert Dube.

Since the adoption of a multi-currency system in February 2009, the country has continued to experience tight liquidity with the cost of borrowing described as high.

Due to the prevailing economic environment, local companies are still finding it challenging to pay back borrowed funding as production is still depressed.

A manufacturing sector survey report released by the Confederation of Zimbabwe Industries last year indicated that capacity utilisation in industries dipped to 36.3 percent last year from 39.9 percent in 2013.

Presenting the 2015 monetary policy statement Reserve Bank of Zimbabwe John Mangudya said credit risk remained a key challenge as evidenced by the average non-performing loans to total loans ratio of 16 percent as at December 31, 2014, compared to 20 percent as at September 30, 2014.

He said total loans and advances increased from $3.7 billion as at December 31, 2013, to $4 billion as at December 31, 2014.

The distribution of the banking industry lending to various sectors as at December 31, 2014, stood as follows: financial services one percent, transport and distribution 16 percent, construction and property one percent, agriculture 18 percent, trade and services two percent, light and heavy industry 25 percent, State three percent, individuals 21 percent, energy and minerals five percent and eight percent went to other sectors in general.