Why Africa’s top banks want bad loans securitised

African banks push regulators to open capital markets for turning bad loans into investment opportunities.

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Africa’s banks now want regulators to ease the constraints that prevent them from tapping into secondary capital markets to securitise non-performing loans and ease the pressure that bad debt exerts on their balance sheets.

Securitisation of non-performing loans has its origin in Europe after the 2010-2012 debt crisis that left banks saddled with piles of bad debt that risked triggering a systemic crisis.