Meridien Bank Burundi

Last updated
Meridien Bank Burundi (MBB)
MBB
IndustryFinance
Founded1 August 1988 (1988-08-01)
Defunct3 May 1995
Headquarters
Bujumbura
,
Burundi
OwnerPrivate / public

The Meridien Bank Burundi [lower-alpha 1] , or MBB, was a bank in Burundi, a subsidiary of Meridien BIAO, a network of African banks with headquarters in Zambia. It was launched in 1988 and failed in 1995.

Contents

History

Meridien Bank Burundi (MBB) was launched on 1 August 1988, the Burundi subsidiary of Meridien BIAO. The parent had headquarters in Zambia and subsidiary branches in Burkina Faso, Burundi, Cameroon, Gabon, Gambia, Ghana, Kenya, Niger, Sierra Leone, Swaziland, Tanzania and Togo. MBB was a limited liability company with private and public shareholders, and had capital of 800 million  BIF [lower-alpha 2] when it was founded. [2]

Meridian Bank of Burundi began operations with 48% of shares owned by local private investors, an unexpectedly large percentage. [3] Public and mixed companies had 27% and the parent had 25%. After six months the public investments were 41.3% of the total. [4] By the end of 1988 the bank had assets of 1210.4 million  BIF, of which 500 million  BIF were government securities. [1]

Melchior Ndadaye, the future President of Burundi, took a correspondence course in banking at the Conservatoire National des Arts et Metiers in Paris between 1987 and 1992. He directed the COOPEC (Coopérative d'Épargne et de Crédit) in Gitega from 1986 until 1988. In 1989 he returned to Bujumbura and became head of Meridien Bank's credit service. [5] He was then put in charge of credit review at Meridien Bank, a post he held when he was elected president in 1993. [6]

In 1994 MBB had a liquidity crisis and its capital was reduced to 506.31 million  BIF. The central bank placed it in receivership on 3 May 1995. [2] It was liquidated in September 1995. [7] External auditors discovered serious mismanagement in both MBB and the parent Meridien-BIAO network. The parent had been financing investments with large intergroup loans, with no clear method of repayment. MBB collapsed after Meridien-BIAO failed to pay back a large loan. [2] All the Meridien-BIAO subsidiaries had failed by June 1995. [8]

Meridien Bank was just one of the companies with state ownership that failed due to poor management. Others were CADEBU, COTEBU, Verundi, Onapha, ORABU, OCIBU and Air Burundi. [9]

Notes

  1. ↑ The name is also given as "Méridien Bank Burundi" or "Meridian Bank Burundi".
  2. ↑ A report written for USAID in 1989 said the initial capital was just 300 million  BIF. [1]

See also

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References

  1. 1 2 International Science & Technology Institute 1989, p. Annex 6.
  2. 1 2 3 Nkurunziza, Ndikumana & Nyamoya 2010, p. 39.
  3. ↑ International Science & Technology Institute 1989, p. v.
  4. ↑ International Science & Technology Institute 1989, p. 14.
  5. ↑ Akyeampong & Gates 2012, p. 416.
  6. ↑ A Hutu for president in Burundi.
  7. ↑ Burundi Recent Economic Developments.
  8. ↑ Kibazo 1995.
  9. ↑ Kwizera 2024.

Sources

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