Govt appoints managers for dead DBZ, Betternow Finance; regrets performance despite 19 recapitalization moves

Finance National Planning Minister, Situmbeko Musokotwane, says two managers have been appointed to handle repossessed Development Bank of Zambia (DBZ) and Betternow Finance Company Limited.

Musokotwane told parliament on Thursday that these would be responsible for loan recoveries and settlement of liabilities.

He also said the managers had been given 90 days to prepare a statement of affairs of assets and liabilities of the two institutions.

“The statement of affairs will determine further actions that the Bank of Zambia (BoZ) may take as provided for under the Banking and Financial Services Act. The managers will also engage creditors of the institutions to facilitate resolution of outstanding obligation,” Musokotwane said.

On DBZ, Musokotwane regretted that it remained in weak capital position despite being recapitalised 19 times since its inception, amounting to K535 million.

Read more: Development Bank of Zambia fails regulatory test, taken over by Central Bank (See other decisions)

“As at 31st May, 2023, DBZ had a regulatory capital of K19.4 million, representing a deficit of K730.6 million in relation to the minimum regulatory capital requirement of K750.0 million. This is a clear indication of a significantly weak capital position,” he said.

He, therefore, announced a new establishment of the new Development Financial Institution arising from the envisaged restructuring of DBZ under Boz possession of the DBZ.

Musokotwane explained that this would operate under a different institutional and governance framework as well as strategy.

“The new institution will be incorporated under the companies act. This will facilitate the inclusion of private equity and ensure the adherence to the principles of good corporate governance,” he said.

On Betternow Finance Company Limited, Musokotwane said the supervisory action to possess it was in line with the provisions of the law and the mandate of the BoZ to safeguard the integrity of the financial system.

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