Tanzania: You Are Yourself to Blame, JPM Tells Commercial Banks

May 09, 2017 | Tanzania Daily News; All Africa

Three banks have over 50 per cent of non-performing loan ratio in this year's quarter one as banks loan repayment default rate have soared to record high.

President John Magufuli has said banks are partly to blame for the rising rate of default on loan repayment as they did not carry out proper due-diligence before lending. Speaking at the 10th National Business Council meeting in Dar es Salaam on Saturday, President Magufuli said had the banks carried out their homework properly they would not be struggling with the rising rate of non-performing loans which reached an average of 9.5 in the first quarter of this year above industry benchmark of five per cent. "Unless you change, the problem will persist," he said at the 40-member dialogue with equal representation from the private and public sectors. Three banks have over 50 per cent of non-performing loan ratio in this year's quarter one as banks loan repayment default rate have soared to record high. President Magufuli said Tanzania Agricultural Development Bank, which is struggling with high rates of defaults was an example of banks which did not carry out proper due diligence to borrowers before lending and had provided loans to non-agricultural activities. He said the government was making efforts to beef up capital for the bank but it was disappointing to see the bank providing loans to non-agricultural activities. Read more on All Africa. Source: All Africa