NPART yet to recover sh85b
Nov 08, 2005
THE Non Performing Assets Recovery Trust (NPART) needs a two-year extension to recover the remaining sh85b of the sh139b in bad bank loans it was created to recover, a top official has said.
By Kiganda Ssonko
THE Non Performing Assets Recovery Trust (NPART) needs a two-year extension to recover the remaining sh85b of the sh139b in bad bank loans it was created to recover, a top official has said.
NPART was formed in 1994 to collect bad loans contracted by Uganda Commercial Bank (UCB) before its mandate was extended in 2001 to include bad loan collections of Uganda Development Bank (UDB).
NPART has had three extensions to its mandate during its 11 years of operation and its current lifespan expired on October 10.
“By its expiry in October this year, the trust had achieved a collection ratio of 44% of UCB portfolio and 16% of UDB. That is sh40.6b in cash collections out of which sh29.9b has been transferred to the Consolidated Fund and sh14b used in expenditure because for every shilling collected, 34 cents are spent,†the trust’s administrator, Julius Izimba, said recently.
Izimba said out of the sh85b, sh33b are market assets with a collateral security value of about sh6b in cases for which the Trust signed agreements with the debtors.
“If two years are allocated to us, we shall recover the sh6b. The Government will decide at the end of the extension to either renew the extension or transfer the portfolios to other controllers. Worldwide, recovery institutions are allowed to operate until they can break even since they are not a burden to the taxpayers,†he said.
Of the sh139b, UDB’s bad debt accounts for sh73.6b and the remaining sh66b belongs to UCB.
‘‘Whereas an asset which was mortgaged in respect of a non-performing asset is not realisable, the asset shall, at the time of winding up of the trust, vest in the Uganda Land Commission which shall hold it on the behalf of Government,†NPART’s Statute says. Izimba said the Government and the land commission would decide the fate of the uncollected funds after the lobbied period.
Ends
THE Non Performing Assets Recovery Trust (NPART) needs a two-year extension to recover the remaining sh85b of the sh139b in bad bank loans it was created to recover, a top official has said.
NPART was formed in 1994 to collect bad loans contracted by Uganda Commercial Bank (UCB) before its mandate was extended in 2001 to include bad loan collections of Uganda Development Bank (UDB).
NPART has had three extensions to its mandate during its 11 years of operation and its current lifespan expired on October 10.
“By its expiry in October this year, the trust had achieved a collection ratio of 44% of UCB portfolio and 16% of UDB. That is sh40.6b in cash collections out of which sh29.9b has been transferred to the Consolidated Fund and sh14b used in expenditure because for every shilling collected, 34 cents are spent,†the trust’s administrator, Julius Izimba, said recently.
Izimba said out of the sh85b, sh33b are market assets with a collateral security value of about sh6b in cases for which the Trust signed agreements with the debtors.
“If two years are allocated to us, we shall recover the sh6b. The Government will decide at the end of the extension to either renew the extension or transfer the portfolios to other controllers. Worldwide, recovery institutions are allowed to operate until they can break even since they are not a burden to the taxpayers,†he said.
Of the sh139b, UDB’s bad debt accounts for sh73.6b and the remaining sh66b belongs to UCB.
‘‘Whereas an asset which was mortgaged in respect of a non-performing asset is not realisable, the asset shall, at the time of winding up of the trust, vest in the Uganda Land Commission which shall hold it on the behalf of Government,†NPART’s Statute says. Izimba said the Government and the land commission would decide the fate of the uncollected funds after the lobbied period.
Ends