The Liberia Bankers Association (LBA) says it will not relent to expose Liberian and foreign debtors who have shown chronic disrespect by not repaying their loans, and has vowed to publish a new list of delinquent borrowers owing amounts of US$10,000 and up.
“And this venture means we are going to continue to publish their names in newspapers to shame them and to let them know that we will not be able to do any business with them if they don’t take immediate action to take care of their indebtedness,” the LBA said.
It can be recalled that last week, the LBA published a list of more than 4,500 individuals and business entities who have defaulted on their loan obligations to several commercial banks operating in Liberia. The amounts of last week’s list of delinquents comprised smaller amounts owed, between US$1 and US$9,999 or their equivalent in Liberian Dollars. The cumulative debt of those named in that particular list amounted to a whopping US$12.6 million and well over L$9 million.
The LBA explained that it has the option to use the civil-law courts to ensure that debtors settle their loans, but it may appear that a weak legal system and prolonged legal cases made that route an unattractive one for the banks.
“The LBA could also ensure that such individuals are not allowed to do businesses with commercial banks and I think it is the most potent decision to take if they don’t measure up,” he said.
The LBA’s fear to also use the fast track court to compel the delinquent borrowers to repay their loans is based upon reports of the failure of the civil law court to successfully adjudicate theft cases involving alleged bank employees caught ‘stealing’ huge sums of money from local banks. The time and money spent to get justice is so huge that the measure is not attractive, the source added.
Another setback is the lack of a credit worthiness system to do background checks on those hoping to secure loans in the country. “If we have a system where someone’s credit is checked against his record of repaying past debts we could make headway but with such a system lacking, we are left with the option of shaming them in the newspapers so that the public can know how negligent they are,” he said.
“If the law was stronger and could be successful in adjudicating debtors and threaten to put them in jail,” another banker said, “it could have served a very useful purpose and many of those who have refused to repay would have done something about it. I think the commercial banks would have to request for collaterals from future customers so that their loans could be settled from the collateral.”
The option of using the law suggests that the civil law court must be strong enough to put debtors and particularly chronic debtors away in prison since their deliberate refusal sabotages the success of the banking sector.
With the next publications of delinquent debtors looming, many Liberians are waiting to see the names of borrowers, especially those Liberian politicians who are interested in seeking public office and yet are, by their refusal to repay their loans, undermining the Liberian economy and by implication, working against the economic growth of the country.
The question in the public domain is who are those to be named in the next LBA publication of debtors it claims are owing thousands of United States dollars more than those on the first list of delinquents to the various commercial banks? If LBA goes through with its naming and shaming, as it says it is determined to do, the answer will soon be available.