As part of the Government of Tanzania’s privatization plan for the Bank of Commerce, MBI developed and implemented a unique bank asset recovery program.

MBI’s team of banking specialists evaluated the financial and operating structure of the Bank of Commerce and assessed its portfolio of assets. This evaluation confirmed that a large share ($122 million) of the Bank’s loan portfolio was non-performing and had been so for a protracted period. With this information in hand, MBI’s team met with Government personnel from the Finance Ministry and the Bank of Tanzania to develop a privatization strategy.

A key portion of the strategy involved MBI developing and implementing an asset recovery plan focused on an innovative debt collection initiative. MBI immediately moved forward to fly a team of debt collection specialists into Tanzania to bolster in-country staff. The collection team began visiting bank branch offices throughout the country. At each location, the team met with the Branch Manager to review the loan portfolio and develop a list of delinquent borrowers to contact. With the local bank’s assistance, appointments were made and discussions initiated to seek payoff of the loans.

Critical to the success of this initiative was the accrued interest forgiveness that MBI convinced both the Central Bank and the Bank of Commerce to offer as an inducement to settle. MBI successfully negotiated payoff agreements on many of the largest delinquent loans in the Bank of Commerce portfolio, returning more than $35 million dollars to the Bank during a ten month time period.