Annual general report of the controller and - Parliament of Tanzania

9.9 Un-recovered Loans and Advances from Customers at
Tanzania Postal Bank’s
Tanzania Postal Bank recovery of loans and advances during
the year under review continued to be unsatisfactory, as
some customers were still not repaying their dues in
compliance to their loan agreements. We noted that large
amounts remained unsettled beyond the expiry dates. This
signifies that some of the borrowers were not settling their
loan installment amounts due as per loans agreements. This
state of affairs was also evidenced by the fact that by 31 st
December, 2007, provision for impairment of loans and
advances stood at Ths.647, 760,329 and bad debts
amounting to Tshs. 1,777,846,427 were written off during
the year under audit.
Although efforts were being made by the bank management
to recover overdue debts by use of courts of law, and
auctioneers to dispose the mortgage property, still there
was no progress on recovery of overdue debts particularly,
from customers with business loans. Under the
circumstances the bank’s funds are tied up in long
outstanding loans and advances hence weakening the
Bank’s working capital to meet its operations. We give
below examples of over due business loans to substantiate
our finding:
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Office of the Controller and Auditor General PA&oBs 2007/08 181