Thursday, 28 April 2016


MORE than 2000 Zimbabweans have had their houses auctioned by the Sheriff of the High Court of Zimbabwe as banks try to recover some of the over US$700 million they are owed by thousands of people who gambled with their immovable assets as to borrow money which, due to the worsening economic climate prevailing in the country, later found themselves unable to service the loans, an investigation by the Financial Gazette reveals.

A research by the newspaper revealed that in the past two years alone, more than 2 000 Zimbabweans have lost their immovable properties — most of them their only family homes — as their creditors pounced on them to recover the vast amounts of money they borrowed.
The number of houses and other immovable properties sold off to meet judgment debts against individuals could be as high as over 3000 since the country moved to use a multi-currency regime.
The courts are currently clogged with cases of borrowers who are unable to repay the various amounts of money they borrowed from the country’s over a dozen financial institutions, amid indications that if this trend is left unchecked, several thousands more families could end up being homeless in the next few years as the bulk of the over US$700 million in banks’ stock of non-performing loans have been secured by these private homes.
Those who have been repaying have been doing so at erratic rates, so much that virtually all their payments only go to service the interest component only, not the principal amounts, keeping them in a vicious circle of poverty.
Some of the properties being sold now involve some banks that closed shop several years ago, as the court processes drag for many years after which these properties that would have been used as collateral, are by the Sheriff either through public auction or through private treaty.
When the Reserve Bank of Zimbabwe set up the Zimbabwe Asset Management Corporation (ZAMCO) — a special purpose vehicle established in 2014 to undertake cleansing of the banking sector by taking over secured bad loans in order to free funds to productive sectors of the economy — non-performing loans had reached a record 18,5 percent of all loans (about US$700 million).
As of December 2015, ZAMCO had acquired US$242 million worth of the bad loans extended to businesses, reducing the ratio to about 13 percent.
It appears like many Zimbabweans — still confused from the Zimbabwe dollar era — were tempted to stampede into borrowing from banks even when they had no viable business projects in which to invest the money.
This week alone, nearly 70 properties were due to be sold at three public auctions, two of them in Harare, and one in Bulawayo.
An auction by Choruma Marias Valuation and Estates Executives on behalf of Agribank, was due to take place today where 16 immovable properties were set to go under the hammer, while tomorrow Ruby Auctions will be putting 53 properties on sale from around the country on behalf of several banks and other creditors, around the same time that Bulawayo Real Estate would be selling 10 properties at an auction to be held at St Patrick’s Hotel in the city.
In February, Drew & Fraser International Auctioneers put on sale 36 properties on behalf of the Sheriff’s office. Another 20 were sold by Bulawayo-based Hollands Real Estate through private treaty.
On April 1 this year, the Sheriff through Livingking Realtors auctioned 36 properties around the country on behalf of several creditors, mostly financial institutions.
Agribank has since mid last year been at the forefront of causing the auction sales, putting an average of 50 properties under the hammer every month.
In November alone, it caused the auctioning of 61 properties and on May 13, it will be putting another 21 houses on the auction floor. Other financial institutions that have been actively pursuing their debtors include CBZ Bank, CABS, POSB, the Infrastructural Development Bank of Zimbabwe and ZB Bank among others. financial gazette


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