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Document Type

Case Study

Case Series

Broad-Based Asset Management Programs

JEL Codes

G01, G28

Abstract

In Burkina Faso, the pre-1990s banking system was characterized by a high level of government involvement and ownership, which led to government-induced lending rather than lending based on creditworthiness. Nonperforming loans in the Burkinabe banking system grew to 10 percent of total loans in 1991. In order to address the banking crisis in 1991, the Burkinabe government entered into a Structural Adjustment Facility with the IMF and other multilateral organizations which prioritized the privatization of government-owned enterprises and included rehabilitation of the financial system. As part of this restructuring, the government established the Bureau de Recouvrement des Crédits du Burkina (BRCB), which acquired nonperforming loans from the restructured banks with the objective to liquidate and recover the assets. The BRCB operated in parallel with other bank restructuring activities, which included recapitalization, reduction of government ownership, and internal reorganization. In order to improve the BRCB’s recovery, the government gave it special authority to seize assets from delinquent borrowers, and the BRCB also published names of such borrowers in an official government publication. The government dissolved the BRCB in 2002 and transferred the remaining portfolio of assets to the Treasury. The BRCB acquired CFAF 64.4 billion (USD 224.8 million) in nonperforming loans, and it recovered approximately CFAF 10.8 billion by the time of its dissolution in 2002.

Date Revised

2021-06-30

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