Loan defaulters in our country enjoy a staggering level of impunity
There is no easy way to say this: Bad loans have, for too long, been dragging our economy down, and their unfortunate persistence continues to act as a roadblock across a myriad of different sectors in our country.
To that end, some observations from Khondoker Rashed Maqsood, CEO of Standard Bank Limited, appear timely and relevant, and we cannot help but agree with them.
Chief among his observations is the need to change the current strategy employed by our financial institutions with regards to bad loans. It is too concerned with trying to cure the problem of bad loans.
Instead, history has shown that prevention has often been the better alternative; instead of focusing all our energy and resources into recovering bad loans, there needs to be more done to prevent more bad loans in the first place.
What this requires are the right laws and policies in place, and strict implementation of them, so that a preventive atmosphere is built — one that detracts potential defaulters.
Too often, loan defaulters in our country enjoy a staggering level of impunity, naturally discouraging the citizens who abide by the banking laws.
In addition, our banking sector has consistently failed to ensure good governance, transparency, and accountability, and these inadequacies have undoubtedly added to the overall negative culture of bad loans. This must be addressed, and there is no alternative to fixing this.
If we are indeed to successfully fight the scourge of bad loans, we need a concerted effort, one which accepts and recognizes the need to make serious changes to our overall policies and banking culture.