With oil revenue no longer able to conceal the cracks, a reckoning is coming for the banks which lent freely to the elite and now face a mountain of bad debt
Two queues can be seen outside any branch of Banco de Poupança e Crédito, Angola's biggest public lender: a long one of hopeful withdrawers of cash, and a short one of depositors. BPC handles the salaries of most public-sector workers but is short of money. Only an anticipated – and desperately-needed – injection of US$1.25 billion by the state can save the day. The amount is roughly the same as that of BPC's total in bad debt, $1.18 bn., most of it from fraudulent or non-performing loans to senior political and military figures, often made without any collateral or even risk-assessment. Prominent members of the ruling Movimento Popular de Libertação de Angola or the government often borrowed without the bank expecting repayment, a bank insider told Africa Confidential.
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