Despite its announcement three weeks ago that it would liquidate the DFC, government now seems to be stalling on the decision after the DFC employees made a public plea for re-organization of the insolvent institution. But tonight there is evidence that if the government refuses to liquidate, it goes against the considered advice of the Inter-American Development Bank which was asked to compile a report on the DFC. The website freebelize.org today posted the full contents of a 29 page IDB report on DFC. The report explains that the DFC got into trouble because board members did not consistently follow procedures or adhere to guidelines as spelled out in the loan and collateral review manuals. The report stresses that this was because of the emphasis on, "rapid growth, quantity over quality and political decisions."
The report notes that 35% of the DFC's loans are non-performing. It also shows that the largest 50 loans DFC made, amount to $160 million, about 46% of the total amount owed. And the prize gem in this crown of ruin is the bankrupt Novelo's company, which is responsible for $35 million in DFC debt, fully 10% of the portfolio.
The report also singles out for poor performance Universal Health Services which owes DFC $12 million, and has another $17 million in debt to local commercial banks guaranteed by the DFC meaning that DFC is responsible for about $30 million dollars of Universal's debt. And the report confirms, that "Universal is not able to service its debt." More than that, the credit files show that no financial projections or feasibility study was done before DFC's board committed this $30 million of publicly guaranteed funds. The report also singles out for poor performance, a $5.9 million loan to Northern Fishermen, and $5.1 million to Royal Palm Villas on San Pedro.
All told it's a catalogue of excess, ruin and carelessness, and the report stresses that it should not be shoveled under the rug. Specifically, the report says that whatever happens, "measures should be taken to ensure that financial records are protected." For more from this report you can click here.