Mozambique’s debt crisis threatens to unravel central bank efforts
There are calls for the country’s smaller banks to combine as four lenders fail over nine months
Mozambique’s smaller banks should combine in an effort to overcome the blow dealt by government debt defaults after four lenders failed over nine months. The country’s debt crisis threatens to unravel efforts by the central bank to strengthen the nation’s financial system through the introduction of new capital and liquidity rules. Central bank governor Rogerio Zandamela said last week that the measures might result in consolidation or force companies to change their operating models. The central bank didn’t respond to e-mail questions sent last week. "Mozambique’s banking sector faces a serious systemic risk of collapse," said Robert Besseling, Johannesburg-based director at EXX Africa, which advises companies on business risks. "Rapid credit growth and concentration of bank loan books are the main risks" while some of the country’s lenders bought significant amounts of loans now in default. The economy of the world’s ninth-poorest nation is in turmoil after state-owned companies p...
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