This is where the bank loans money to the person or entity, and, they do not pay the money back, even with repossession. this is a big drawback in the third world, especially uganda, where ten percent of loans that need to be paid back this year were not.
There is a way out of this, even without deferring repossession. if you were to observe that money is a made up thing in the bank, and, there is not enough paper money in the world to, for example, endow the whole of the u.s.a. with paper money, as there is literally trillions of dollars in circulation, then it would make sense to observe that money is a 'imaginary barter system.'
This means that we could just wipe the debt away and say the money was repaid, yes? what is the difference, the money was owed, it is not there, and, poof it is there. i think these laws get in the way of the private sector, as, it was created in the loan, and, loaned to others, to create more loans, often the fastest way money grows in any country.
Of course, that might be denied, which means we need a new plan, yes? this could be achieved by observing that the reason these loans are not paid back is because of a hole in their income or such. this could be alleviated by the bank buying goods from the entity that folded, at cost price, thereby allowing good business practice, with a penalty on their original loan, of course. this would shore up the business for further dealings, which are taxed, so there is something in it for the state - there is a building and bank account, it gets taxed, do you want to see it operating?
But, there is the problem of salaries 'going down the toilet.' this would be where the person lending the money would need an income, and, often they are fired with businesses folding, or, especially in africa, socio economic factors. this can be solved by them repaying their loan with their package, unless they are fired, in which case - that they are fired? - they could work for the bank as 'sales reps?' they could earn a minimum wage with a 'bread line package,' and, they could earn commission on that with good results.t he backing of the bank will allow them to buy and sell in bulk, they will have incentive to work hard, and they will be able to focus having the bare essentials. of course, this will attract people to lend money from the bank just to get the credit and package, but, this could be stopped by approving loans, of course. this would mean they would have to sell things for the bank, from the entities they are buying from, those businesses that are not performing, of course. this might mean excess staff, but, this could be helped by having the personal loans stacked onto the business and the business having these 'new eager recruits' being employed in businesses under administration, or, new start ups they are expected to run.
Of course, there will be further failures, let's say that also 'turns to junk?' this could be solved by franchises being set up by the bank and having them work there to pay back the loans they made a long time ago, as, franchises, properly researched, can deliver services to persons with needs. basically, the banks are essential in providing new jobs to the country, making money for themselves through sales or income, and otherwise making a difference, through researching how to create profit yielding undertakings instead of worrying about and getting staff involved in lower dividend yielding tasks.