Africa

Revolving funds that were meant to help Kenyan youth and women start businesses are chalking up bad debt, causing fear of a looming liquidity crisis that could also rob them of support from financiers, Business Daily reported. Fund managers said there has been a huge build up of bad debts in the past 12 months forcing them to consider involving the provincial administration in the disbursement of new loans.

Ireland’s new head of financial regulation, Matthew Elderfield, said he planned to address serious corporate governance failures at the financial institutions by limiting the number of directorships that bank board members can hold, The Irish Times reported. Mr Elderfield said he planned to publish proposals shortly that will “set more exacting standards” for the boards of banks and insurers. “Recent history shows that many boards need to raise their game.

Workers at a French timber subsidiary in Gabon held managers hostage in a French-style "bossnapping" to secure their pay demands, both sides said Tuesday, Agence France-Presse reported. The managers, including the new Chinese buyers of the firm, were released on Monday several hours after being held at their plant in the port of the capital Libreville. The dispute took place at the premises of Leroy Gabon and Pogab, which are both subsidiaries of the French plywood company Plysorol, which was placed in receivership last week by a French court.

The cost of borrowing from commercial banks could come down significantly with the launch of an information portal that will allow lenders to assess their customers based on their credit history, Business Daily Africa reported. Beginning July, it will be mandatory for commercial banks to share information on all non performing loans in their books, including defaulters with the Deposit Protection Fund, with licensed credit reference bureaus. Though the system will punish borrowers with dubious credit records, it is also expected to help good customers negotiate better credit terms.

Kenya may be headed for a jobless recovery, economists said, citing new labour market data showing that the productivity of workers has declined to record levels, forcing businesses to turn to capital for additional capacity to keep pace with growth, Business Daily Africa. The data from the Federation of Kenya Employers (FKE) shows that economic hardships linked to soaring inflation and skills deficiency has shackled productivity growth on factory and shop floors, making workforce expansion unattractive to business leaders.

Commercial banks are charging high premiums for difficulties they face establishing the value and authenticity of securities that their customers offer for loans, pushing the cost of credit beyond the reach of many Kenyans, a new lending market report indicates, Business Daily Africa reported.

Kenya’s treasury has busted its domestic borrowing target for the current financial year, pointing to the fact that the economy is not out of the woods yet and sparking debate over the country’s ability to cope with the debt in the long term, Business Daily Africa reported.

Kenya Commercial Bank Ltd. and PTA Bank Ltd. have ended the receivership of Uchumi Supermarket Ltd., the retail chain said on its Web site yesterday, BusinessWeek reported on a Bloomberg story. Specialized Receiver Manager, Jonathan Ciano, has been appointed as Chief Executive Officer, Uchumi said. Uchumi went into receivership in June 2006 with debts of 2.2 billion shillings ($29 million), of which 957 million shillings was owed to Kenya Commercial and PTA. The retailer’s shareholders voted to end the receivership on Jan.

A judge has thrown out an application by Kenya Commercial Bank urging him to disqualify himself from hearing a dispute between it and the Kenya Planters Co-operative Union (KPCU), Business Daily reported. Commercial Court Judge, Mr Justice Muga Apondi, ruled that his conduct on the matter was above board and had not favoured any party during the entire trial. KCB, through lawyer Tom Macharia, wanted the case transferred to another judge as a result of what he termed as “perceived” bias by Mr Justice Apondi.

Commercial banks were on Thursday scouring their records for signals as to how big the government’s decision to revoke more than 130 titles for prime properties in Nairobi, the first of a countrywide cancellation of dubious land ownership deeds, would damage their loan books, Business Daily Africa reported. Lands minister James Orengo said his office had used executive orders to cancel 137 titles that were illegally issued for public land without following due process.