‘Government won’t revive Zampost Micro-Finance’

GOVERNMENT will not revive Zampost Micro Finance Limited due to its liabilities, Finance Minister, Bwalya Ng’andu has said.

The minister said there were no plans to resuscitate financial institutions because its liabilities were in excess of the assets.

Dr Ng’andu indicated that the Bank of Zambia was, therefore, proceeding with the winding up of the institution and was working on recovering the debt owed to creditors.

He was responding to Independent Kantanshi Member of Parliament Anthony Mumba who wanted to know what caused the liquidation of Zampost Micro Finance Limited in July, 2019 and whether there were any plans to resuscitate the company;

Dr Ng’andu told Parliament that the liquidation schedule for the financial institution had been submitted to court.

He said the micro finance institution failed to meet deposit obligations as well as obligations to other creditors.

As a result, he said, it was deemed insolvent in line with the Banking and Financial and Services Act number seven of 2017.

The minister explained that liquidation of Zampost Micro Finance Limited was as result of excessive borrowing and misapplication of depositors’ funds.

Dr Ng’andu said failure by the shareholders to inject capital and failure to meet deposit obligations prompted the Bank of Zambia to take possession of the institution.

“Prior to taking in possession of Zampost micro finance, the Bank of Zambia made efforts to address the deteriorating financial conditions of Zampost in order to save it from total collapse.

“Bank of Zambia directed the board of Zampost Micro Finance to replace its chairperson and enhance the governance of the institution by transforming the institution from Transport and Communication to Ministry of Finance and for the micro finance institution to formalise loans and urgently recapitalise the institution” he said.

Meanwhile, Dr Ng’andu said employees’ fate would be addressed after paying off all the creditors.