Debtors To Face COIs

 

Over 500 bad debtors that took unsecured loans from two state owned financial institutions, Sierra Leone Commercial Bank (SLCB) and Rokel Commercial Bank (RCB) are reported to be in quandary and having sleepless nights.

According to report, senior officials of the two state owned banks on Monday 11th February, 2019 tendered to the Commissions of Inquiry (COIs) documents detailing names of debtors that failed to honour their debt obligations over the years.

The lists are said to be filled with the names of politically connected persons who took out loans with the two banks and have been sent to the COIs as instance of corruption. It was received by the Registrar of the Inquiry as part of the issues to be investigated.

A lawyer well grounded in commercial matters told The Exclusive that punishment could be inflicted on loan defaulters with no collateral security.

It could be recalled that when President Julius Maada Bio took over power on 4th April, 2018, he singled out politically connected persons who had obtained loans from the two state owned banks and had never bothered to service them, nor repay what they owed the banks. He said his government would go after defaulters.

At the SLCB that was owed over Le300bn by such bad debtors, the fallout was heavy as President Bio replaced the Board Chairman and the Managing Director with new ones.

It could also be recalled that both SLCB and RCB had to be heavily recapitalized by the former government, failing which they would have gone under as they were saddled with huge unpaid un-serviced debts that greatly constrained their liquidity, hence their ability to lend, thereby restricting their profitability.

Notwithstanding the two banks going public with the names of their heaviest debtors, they failed to pay what they owed.

Debt collection is a prime financial activity of the Bio administration and one of the main reasons for setting up the COIs. The Governance Transition Team’s (GTT) Report maintained that the Koroma administration left behind around US$2 billion foreign debts and Le4.9 trillion domestic debts.

Thus, the purpose of the COIs, among others, is to unravel how Sierra Leone declined from being a low debt nation in 2007 with a promising economy to become a highly indebted one 11 years after.