SHAL­IZA HAS­SANALI

Se­nior In­ves­tiga­tive Re­porter

shal­iza.has­sanali@guardian.co.tt

The Na­tion­al En­tre­pre­neur­ship De­vel­op­ment Com­pa­ny (NED­CO) is seek­ing the pub­lic’s help to lo­cate nine ve­hi­cles and more than 200 delin­quent cus­tomers who have de­fault­ed on their loan pay­ments. In May, NED­CO post­ed on its Face­book page a list­ing of 203 cus­tomers who owed the com­pa­ny and could not be found. Days lat­er, NED­CO called on the pub­lic to pro­vide anony­mous in­for­ma­tion to its re­cov­ery de­part­ment re­gard­ing the where­abouts of nine ve­hi­cles and their own­ers. A list of the ve­hi­cles’ reg­is­tra­tion num­bers and mod­el types, in­clud­ing the own­ers’ names, was plas­tered on the page.

Chair­man of NED­CO Clar­ry Benn said since the com­pa­ny start­ed its name and shame dri­ve, “We have been able to re­cov­er mil­lions of dol­lars, and that is over the cur­rent loan port­fo­lio.”

Last year, NED­CO named and shamed 161 delin­quent clients ow­ing them. Many of these delin­quent clients, Benn said, came for­ward to ser­vice their loans. In 2022, NED­CO stat­ed they were owed $1.5 mil­lion from 65 loans that went in­to de­fault. At that time, the com­pa­ny had more than 2,000 clients on its data­base, and at the end of the fi­nan­cial year 2022, there were 1,394 ac­tive ac­counts with a val­ue of $25,428,752.89.

This year, the list­ing of bad-pay­ing cus­tomers has in­creased. Many of these de­fault­ers have been ow­ing NED­CO for years, and when they are found, they give a list of ex­cus­es for not pay­ing. Benn said if these en­tre­pre­neurs failed to man­age their busi­ness­es prop­er­ly, re­sult­ing in the clo­sure of their es­tab­lish­ments, they were still ob­lig­at­ed to re­pay the loan.

To re­cov­er the mon­ey, Benn said, NED­CO had tak­en some en­tre­pre­neurs to court. In­cor­po­rat­ed in 2002, NED­CO’s prin­ci­pal ac­tiv­i­ty is to pro­vide fi­nance and sup­port ser­vices to as­sist small and mi­cro busi­ness­es in T&T. NED­CO falls un­der the purview of Min­is­ter of Youth De­vel­op­ment and Na­tion­al Ser­vice Fos­ter Cum­mings. Its sole share­hold­er is the Gov­ern­ment.

Benn said the name and shame list helps NED­CO track down these delin­quent clients and their ve­hi­cles. Hav­ing served as a for­mer ex­ec­u­tive di­rec­tor of Unit Trust Cor­po­ra­tion, Benn said peo­ple al­ways try to avoid their fi­nan­cial oblig­a­tions. “That is the re­al­i­ty. Through­out the coun­try, we have in­stances of that. Every­body does look for a way to get away from what is prop­er and of­fi­cial. They are al­ways look­ing for a deal.”

Benn could not say how much the 203 clients owed NED­CO, but he said the com­pa­ny was go­ing af­ter them. “You just have to be on it. We do not give up un­less you die. We have been mak­ing progress in go­ing af­ter them.”

He said what­ev­er these clients pledged as se­cu­ri­ty would have to be for­feit­ed. “What­ev­er you would have had as col­lat­er­al, we would have to deal with that. That is what will re­pay us.”

Benn said all fi­nan­cial in­sti­tu­tions are faced with de­fault­ers. “You, as an in­sti­tu­tion, have got to en­sure that the loan is fair­ly cov­ered. All our loans ever since have some kind of col­lat­er­al.”

Benn de­nies PNM par­ty card­hold­ers favoured

How­ev­er, NED­CO’s hunt for these de­fault­ers and ve­hi­cles has at­tract­ed un­favourable com­ments on so­cial me­dia. One per­son post­ed on NED­CO’s Face­book page that the com­pa­ny on­ly grants loans to PNM friends and fam­i­ly mem­bers who are par­ty card­hold­ers. Benn de­nied this al­le­ga­tion. “I don’t know of any in­stance, and no­body could claim that any­body would have earned or got­ten a loan be­cause they showed some card be­long­ing to some po­lit­i­cal par­ty.”

He said en­tre­pre­neurs ap­ply­ing for loans go through a strin­gent process. “We are very re­lent­ing with that. We don’t care who the dev­il you are be­cause these monies that you would have bor­rowed be­long to tax­pay­ers.” He said NED­CO grants loans with the ex­pec­ta­tion that its clients will pay. “We have a loan port­fo­lio which is en­hanced to the re­pay­ment.”

BOX $408M in loans dis­bursed in 20 years

In the last fi­nan­cial year, NED­CO loans amount­ed to al­most $26 mil­lion. NED­CO of­fers loans up to $250,000 to first-time bor­row­ers. Re­peat bor­row­ers can ac­cess loans val­ued at $500,000. The in­ter­est on the loans is eight per cent. “And in this cur­rent fi­nan­cial year (2023-2024), we have set a loan tar­get of $30 to $35 mil­lion. And we ex­pect to re­alise that tar­get.”

NED­CO would al­so pro­vide grants of $20,000 to en­tre­pre­neurs in the start-up phase of a busi­ness. “All now we have a grant of $50 mil­lion. This year we hope to dis­trib­ute about $20 mil­lion of that. Next year an­oth­er $20 mil­lion of that.” There is no re­pay­ment on these grants, Benn said. These grants will be dis­bursed next month. NED­CO’s 2018 fi­nan­cial state­ments showed the com­pa­ny had writ­ten off loans amount­ing to $2,953,192.

A 2022 Pub­lic Ac­counts (En­ter­pris­es) Com­mit­tee (PAEC) in­to the ex­am­i­na­tion of NED­CO au­dit­ed ac­counts, bal­ance sheet and fi­nan­cial state­ments dis­cov­ered that the com­pa­ny had paid out $66 mil­lion in “bad loans” for the pe­ri­od 2016-2017.

Ap­pear­ing be­fore a 2017 PAEC, NED­CO had al­so re­port­ed a “bad loans” loss of $94 mil­lion be­tween 2008 and 2014. The com­mit­tee chaired by Wade Mark heard the bad debt ac­counts were loans deemed ir­re­triev­able from 3,631 clients. Com­mit­tee mem­bers asked NED­CO to pro­vide in writ­ing a plan to man­age the in­creased lev­els of its ir­re­triev­able debts, which should in­clude tar­get lev­els it would main­tain at the end of each fis­cal year.

They al­so asked that mea­sures be out­lined to mon­i­tor and eval­u­ate its loan port­fo­lio to pre­vent loss­es from delin­quent or in­ac­tive ac­counts. Re­spond­ing to the ques­tions on May 1, 2023, the then per­ma­nent sec­re­tary at the Min­istry of Youth De­vel­op­ment and Na­tion­al Ser­vice Fa­rook Ho­sein stat­ed that NED­CO’s loan de­fault man­age­ment pol­i­cy had been pre­pared and was un­der re­view by its board.

Ho­sein said that this pol­i­cy cov­ers the man­age­ment of all ac­counts with­in the re­cov­ery unit. This pol­i­cy, Ho­sein stat­ed, was cru­cial for NED­CO as it out­lined the strate­gies, pro­ce­dures, and guide­lines for han­dling loan de­faults and en­sured the sus­tain­abil­i­ty and suc­cess of the in­sti­tu­tion’s lend­ing op­er­a­tions.

By ef­fec­tive­ly man­ag­ing loan de­faults, Ho­sein said NED­CO can safe­guard its fi­nan­cial health, main­tain port­fo­lio qual­i­ty, and pro­vide ac­cess to cred­it to un­der­served com­mu­ni­ties. The com­mit­tee al­so asked NED­CO to list mea­sures to im­prove com­pli­ance on debt re­pay­ment in the com­pa­ny’s loan port­fo­lio. Ho­sein point­ed out that the com­pa­ny had tak­en sev­er­al mea­sures to im­prove com­pli­ance on debt re­pay­ments by cre­at­ing a cred­it and ad­min­is­tra­tion pol­i­cy that was un­der­go­ing eval­u­a­tion by its board.

This han­dled the man­age­ment of delin­quent ac­counts in NED­CO’s port­fo­lio and out­lined the pro­ce­dures and guide­lines for man­ag­ing such ac­counts. The com­mit­tee asked NED­CO how the write-offs would be man­aged.

Re­spond­ing to this ques­tion, Ho­sein stat­ed, “NED­CO’s loan write-off to bad debt ledger pol­i­cy 2022 was ap­proved by the board of di­rec­tors on June 29, 2022, with the pro­ce­dures be­ing sup­port­ed by the Chief Ex­ec­u­tive Of­fi­cer on Ju­ly 4, 2022. The pol­i­cy cov­ers the fi­nan­cial write-off treat­ment of all de­fault loans with­in NED­CO. “At the same time, the pro­ce­dures out­line the steps to be fol­lowed when ac­counts are to be des­ig­nat­ed un­col­lectible and are to be iden­ti­fied for re­moval from NED­CO’s ac­tive port­fo­lio to the bad debt ledger,” Ho­sein stat­ed.

From 2002 to Sep­tem­ber 2022, NED­CO dis­bursed 13,851 loans val­ued at $408 mil­lion and cre­at­ed 20,776 job op­por­tu­ni­ties over that same pe­ri­od. over that same pe­ri­od.