BY PAUL TENTENA
KAMPALA, UGANDA- Nigel Smith, the KPMG Head of Debt Advisory and Restructuring in East Africa has said some auditors and banks in Uganda are putting businesses out of work (winding up businesses) yet they can be rescued by restructuring of loans for profitability.
Smith, who was in Kampala to assist lenders and corporate borrowers to save companies, while reducing bank provisions and increase banks’ profits without legal action or enforcement said failure of a company to achieve its own forecasted trading performance could result in an under-performing loan in the near future but remedial action can prevent a default and legal action.
In finance, a default is failure to meet the legal obligations (or conditions) of a loan, for example when a home buyer fails to make a mortgage payment, or when a corporation or government fails to pay a bond which has reached maturity.
“KPMG recommends lenders proactively investigate these companies before provision is required,