IMF How To Notes

How to Assess the Benefits of Nonperforming Loan Disposal in Sub-Saharan Africa Using a Simple Analytical Framework

ByIrina Bunda, Zhangrui Wang

June 8, 2021

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Irina Bunda, and Zhangrui Wang. "How to Assess the Benefits of Nonperforming Loan Disposal in Sub-Saharan Africa Using a Simple Analytical Framework", IMF How To Notes 2021, 006 (2021), accessed 12/13/2025, https://doi.org/10.5089/9781513583099.061

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Summary

The coronavirus (COVID-19) crisis, which has hit financial systems across Africa, is likely to deteriorate banks’ balance sheets. The largest threat to banks pertains to their loan portfolios, since many borrowers have faced a sharp collapse in their income, and therefore have difficulty repaying their obligations as they come due. This could lead to a sharp increase in nonperforming loans (NPLs) in the short to medium term.

Subject: Collateral, Distressed assets, Economic sectors, Financial crises, Financial institutions, Financial sector policy and analysis, Financial statements, Loans, Nonperforming loans, Public financial management (PFM)

Keywords: Africa, Collateral, disposal strategy, Distressed assets, Excel template, Financial statements, loan portfolio, Loans, management cost, Nonperforming loan disposal, Nonperforming loans, raise capital requirement, Sub-Saharan Africa

Notes