|
Can you give us more background on NBC Holding
Corporation and its structure today?
NBC Holding Corporation was established on the
1st October, 1997, and the purpose
of the establishment of this Corporation was to
take care of (a) non-banking activities such as
landed properties; assigned with the job to sell
all landed properties which used to be under the
National Bank of Commerce. (b) to coordinate activities
between the two Banks (NBC (1997) Ltd and NMB
Ltd) (c ) to hold shares on behalf of the Government
for the NBC 1997 Ltd, which has now been sold
halfway to ABSA Bank and National Microfinance
Bank Ltd which is now under contract management
by an American Manager. All these 3 units were
established through the split of National Bank
of Commerce in the spirit of privatization in
the financial sector.
At the beginning what was the value of the
properties you got from NBC in 1997?
We got 388 landed properties with a value of 14
billion shillings. We have already sold 200 plus,
fetching a total of 13million shillings, and we
are remaining with 159 properties.
How big is NBC Holding Corporation in terms
of number of staff?
39, that includes drivers, secretaries, etc.
What are the real estate prices here in Tanzania
compared to other East African countries?
When we started about 2 years back, the prices
were good. We really sold a lot of our properties
in the first year, up to the second year; but
as we go along it looks as if we are not doing
very well, because the real estate market has
been saturated as a result of privatization. So
even the prices are not as good as we started.
When we started we could get prices 3 times the
valuation amount.
What strategy are you putting in place to
face the problem of a saturated market. You still
have 159 properties to be sold?
What we are doing is we see people, we go out.
We don't sell from our desks, we go to the regions.
We visit people, we talk to them and make them
aware that we are selling properties. We are proud
to say that our houses cannot be compared to any
houses of any other corporation/company in the
country. Being a Bank, by then the only Bank,
the houses were being well kept, good located,
most of the houses are placed in prime locations.
Can anybody buy it, even foreigners,
or is it just for local people, or Tanzanians?
We have sold to Embassies, Foreign companies -
as long as you meet the requirements of the country,
of staying in the country. If you are an Embassy
you are surely allowed to buy a house through
the Ministry of Foreign Affairs.
How much of your work is dedicated to keeping
the properties in a good state?
We have our resources. We have put some guards
who are staying in these houses. We tell them
to clean the surroundings, clean the houses, and
sometimes we visit to see what they are doing,
and they are still well kept.
One of your activities is the collection of
debts, can you elaborate on that? It seems that
this is a major issue here for Banks, court injunctions
and debts which have not been paid, in the past.
One of the reasons that the National Bank of Commerce
was split up was because it had accumulated a
huge portfolio of bad debts. So when it was split
up, a number of debts that had been fully provided
for, were assigned to NBC Holding Corporation
for collection.
| So when we started, we started with about 44 billion - the principle amount, with 51billion as interest. As it will be noted the principal amount is smaller than the interest figure. So the entire portfolio adds up to of 95 billion, i.e. principal plus interest. That's what we inherited from the former NBC, for collection. When we took over, there was a foreign company that was doing the collection of debts; it was called MBI. It collected hardly 1.9 billion. It had a contract of one year. So after the year they went off, and we took over. In the first year we collected about 6 billion. Second year - about 1.1 billion. We are using local debt collectors, LART, PSRC, for those specified companies. We are also using NBC 1997 services, sometimes NMB services and ourselves.
What is the biggest problem you are facing while collecting the debts?
The biggest problem is the discipline of the people. If you have borrowed, definitely you have to pay. You know you have got an obligation. Whenever you go to a bank and ask for a loan, they are not giving you anything except depositors money. You get the money and then your main duty is to pay, as per agreement. You sign an agreement that you will pay within a year and your sources of repayment are a, b, c, d. The sources of repayment will have to adhere to the uses of the funds. In most cases you will find somebody who goes to a Bank, he asks for a loan - "I want to develop this farm". Instead of developing the farm, he goes to do other things which do not guarantee the money to repay the loan. Then the loan just accumulates. When time comes, you want to get your loan paid, he goes to court to get a court injunction.
Would you say that the courts are effective enough?
Courts are not effective because I don't think they understand the commercial part of it, especially the Banking. NBC was the only monopoly bank since 1967. Now being a monopoly bank in a socialist country, there were no cases for banks, in a way that even the courts had not geared their efforts to deal with commercial cases. You may go there and you are right, but because they don't understand much, they don't have the expertise of commercial cases. In fact, there are a lot of mishandling of these cases.
When we started we inherited about 1000 single cases, and 680 criminal cases. But how they are being handled sometimes leaves a lot to be desired in most cases. We are now left with only 400 cases for the coming two and a half years. What we do, we look at a case, and we find out that this will only bring a problem to courts, we check it out, and we sit with the complainant, and settle out of court, and sign a Memorandum of Understanding.
What would be your final message to our readers?
The business climate in Tanzania is good, compared to where we are coming from. We used to have 16% inflation. We are now talking of single digit. Opportunities are imminent. Tanzania is an un-exploited country we should say. We have minerals in the northern circuit. We have now South African companies who are coming to establish themselves. The climate is conducive, but the mechanism is no longer in place so there are a lot of things going out undetected. So if we had investors like the South African and others, there is a lot of opportunities in Tanzania. |
