Zim banks to auction properties

Published: 06 December 2013

An increasing number of companies and individuals are losing real estate they pledged to banks and financial institutions as collateral for loans as the liquidity crunch continues as evidenced by auctions set for today by Homeland Real Estate in Harare.

Struggling companies like Genesis Investment Bank, Office Solutions, Zimcet (local non-governmental organisation), Gauntlet Security and Northern Coal will have some of their fixed properties going under the hammer to recover outstanding debts.

The debt trap has not spared prominent individuals such as senior Reserve Bank of Zimbabwe employee Millicent Mombeshora and businesswoman Miriam Patsanza who are also set to lose their Borrowdale and Old Marimba Park houses respectively.

Homeland Real Estate will today put a combined more than 40 properties under the hammer at the Raylton Sports Club at the behest of banks like CBZ, Kingdom, BancABC, Trust, AgriBank, Fidelity Life Financial Services and Old Mutual Investment Group Property Investments.

Recently published financial statements by banks show that most institutions are struggling to recover debts from companies and individuals as the economy continues to wobble under the strain of the liquidity crunch.

The financial crisis extends to the fragile agriculture sector where most farmers have failed to repay their loans forcing government to intervene to save them from collapsing. Vice-President Joice Mujuru in October this year asked banks to consider a moratorium on farmers’ debts so that they could borrow fresh loans to finance their 2013/14 season.

"Financial institutions (will) be engaged with a view to securing a moratorium for debt repayment by farmers already saddled with debts to the same institutions, to enable them to access funding for the 2013/14 agricultural seasons," Mujuru said.

The Zimbabwe debt crisis has been largely compounded by the high interest rates of between 15 and 35% for loans in a multi-currency economy. Former Finance minister Tendai Biti on several occasions lashed out at banks for allegedly being more interested in profiteering than rebuilding the economy. He ordered banks not to charge more than 10% on loans from money accessed from local insurance and pension funds.

- theindependent