The Fijian Parliament yesterday approved a motion by Attorney-General and Minister for Economy, Civil Service, and Communications Aiyaz Sayed-Khaiyum to increase the Government’s guarantee from $170 million to $250 million for the Fiji Development Bank’s (FDB) borrowings.
He said the additional guarantee would allow FDB to lend to appropriate businesses and individuals.
He said it did not mean that FDB would use the full $80 million.
“It may or may not, but we need to give them that headroom if you like, to be able to ensure that they can go out and participate in the market on equal footing,” he said.
He said the Government had announced the COVID-19 recovery credit guarantee scheme to provide working capital support for businesses to sustain themselves during the pandemic.
Mr Sayed-Khaiyum said the banks, including FDB, agreed to no additional fees and interest, and interest-only payments for the first two years.
“Government will in turn, subsidise interest payments for the first two years.
“So essentially we are giving them two years to stand on their feet start generating revenue, economy hopefully gets up, bouncing back the way it was. Then in the third year, they start doing their repayments.”
He said the banks had also agreed to waive all fees.
Mr Sayed-Khaiyum said this assistance provided through FDB was aimed to provide relief and assistance to businesses by helping them maintain the business operations, support employment, and maintain the livelihood of benefits during the pandemic.
He said the bank had approved a total of 3263 loans to customers with a value of $50.9 million last month.
“These include 1946 loans in the microcredit, 906 loans in the small category, 291 loans in the medium category and 120 loans in the last category. Various business sectors have applied in three main sectors that make up 78 per cent of the approved loans are the wholesale, retail, transport and professional business services.
“The remaining 22 per cent are loans to the agriculture sector. Building and construction sector, the manufacturing sector.
“We say colloquially engines of growth. The bank is confident we’ll be able to bounce back really quickly, as borders open.”
In addition, he said, a total of 8114 applications, with a total value of $139.1 million had been received and were being processed.
“It does not mean all of them will get approved. The bank has forecasted a total of $100,000 outlay, under the COVID-19 credit guarantee scheme. The bank’s total outlay forecast is at 22 which will turn into a monster $397.7 billion that the bank’s total inflow forecast for 2021 amongst $247.7 billion, which indicated an additional $3 million is required to finance the total outlay of $397.7 billion.
“This will cater for the scheme as the existing government guarantee of $170 million, is not sufficient to cover the new borrowings under the scheme.”
