NEWLY appointed Development Bank of Zambia (DBZ) board chairperson Noel Nkoma says the new board will ensure that it restores public confidence in the Bank, adding that before the end of the year, they want to see DBZ resume lending operations.
In an interview, Nkoma said the Bank needed to play its rightful role of supporting the growth of small-medium enterprises.
“It is very important for the new board, first of all, to go in with a clear understanding that the Bank comes back to play its rightful role of supporting [the] growth of the SMEs. Beginning to support those enterprises and businesses with the view to be able to grow the economy. DBZ is a very important institution in as far as the developmental agenda or the new dawn is concerned. We think that there could have been problems in the past, but I think the new board has got [a] responsibility to be able to begin to transform, reposition and turn around the Bank. We have to deal with issues to do with the governance structures, any board level as well as management level. We need to begin to deal with the issues of revisiting what we call our credit underwriting procedures and processes, which should stick to transparency and integrity,” he said.
“We think that now we have to begin to restore confidence in the institutions, that the institutions can be able to support and to be able to begin to do what is mandated. The President, the Minister of Finance are very clear in terms of their support in restoring the fiscal fitness of the Bank. We know that this we can’t do alone, we need the support of the stakeholders, the support of the shareholders, the support of management for the board to provide that necessary oversight leadership to the Bank.”
He said there was need to interrogate why the Bank had a 90 percent portfolio of non performing loans.
“We have to interrogate why we have a portfolio, a huge portfolio of about 90 percent of non performing loans. We have to understand what could have been the issue and how do we avoid the recurrence of such issues. We have to now begin to put in place measures which will speak to what we call lending for change. Let us lend for business to grow, not lending for businesses to fail. The issue of repossessing businesses or collateral should be really a last resort. Those businesses which are facing difficulties, we as a Bank will be able to see what kind of support we should be able to give to those businesses to come back on track,” he said.
And Nkoma said DBZ should by the end of 2022 clean its balance sheets and resume lending.
“What we want to see is that before the end of the year, DBZ should clean its balance sheets, begin to lend again, and when I talk about lending it should be quality lending. Quality lending which meets the entire risk assessment and more importantly bankable proposals. We want also to strengthen the governance policy within the Bank, so much so that we are not seen to be compromised in our lending processes. When we clean the balance sheets, we demonstrate that the Bank is back on track and beginning to do what it is mandated to do, we will be surely guaranteed of shareholder support. But we have to first demonstrate that this Bank can be turned around and it can be more useful to the government’s developmental agenda, to the government’s transformation and to the people’s aspirations. Let us restore DBZ to its past glory. We need to put in place measures to restore in the institution, the credibility of the credit underwriting should be beyond reproach,” said Nkoma.