Development Bank against defaulters

The Development Bank of Namibia (DBN) has set up a special unit to help contain increasing non-performing loans.
Quarterly results released by the bank on Tuesday showed that its loan book stood at N$1.364 billion at the end of March 2013 against a target of N$1.440 billion while the impairment ratio showed a 2.2% increase from the previous quarter to 7.6%.
The increase in impairments means the bank is now above the 7% benchmark of the Association of African Development Finance Institutions (AADFI). Last year, the bank estimated the impairment ratio to peak at around 6% before stabilising this year.
DBN said that the Workout and Recoveries Unit was set up as a result of the growth in the bank’s loan book and to assist customers in distress with financial advice on how to overcome their cash flow challenges. This responsibility was previously with the Lending Department.
The bank is hopeful that the setting up of the new unit, responsible for monitoring all the loan arrears on a daily basis from day one when an account falls into arrears, will free up lending personnel to concentrate on the growth of the loan book.