NEDCO Explains Bad Debt Write Off

The National Entrepreneurship Development Company (NEDCO) says most lending institutions adhere to the practice of Provisioning for Bad and Doubtful Debt on an annual basis, with the accounts then being transferred from the balance sheet to a Classified Debt Ledger. The State entity responded to revelations made on Wednesday during the sitting of the Public Accounts Enterprises Committee of Parliament, which revealed that NEDCO wrote off some $66 million in bad debt. In a statement on Thursday, NEDCO noted that this practice avoids the value of loans of the balance sheet being overstated. NEDCO said despite accruing Provisions against Bad and Doubtful Debts since its inception in 2002, the company continued to carry these accounts on the loans trial balance, which resulted in the figures reflecting a high level of bad debts. NEDCO added these accumulated provision amounts were only applied in 2017 to move 3,631 accounts with a principal value of $66 million to a Bad Debt Ledger for further management by the Recoveries Unit.