Minam: COVID loans not free

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FDB’s chief executive officer Saud Minam. Picture: FILE

The Fiji Development Bank has refuted claims that loans taken during the coronavirus pandemic were guaranteed by Government and therefore not required to be paid back.

FDB’s chief executive officer Saud Minam said the $200 million soft loan facility provided by the last government in 2021 to help businesses with working capital during COVID-19 came with a government-guarantee that was only valid for two years.

“If you really look at it from 2021 August, September until now, the honeymoon period of two years for every single customer is over,” Mr Minam told The Fiji Times.

“So it’s now the responsibility of the individual or the company who was actually availed this loan from any bank, not only from FDB but any other any commercial bank because this was open for all the banks in Fiji, it’s now their responsibility to pay,” Mr Minam said.

The $200m credit guarantee scheme was disbursed to the Reserve Bank of Fiji who then on-lent funds to commercial banks at a very low interest rate of 0.25 per cent and on the condition that they are lent at not more than 3.99 per cent.

FDB, according to Mr Minam, had approved close to 4000 applications for total borrowing of around $60m, the largest share from the roughly $130m that was taken up by all banks under the scheme.

He said so far, some FDB customers have cleared their loans and while others are still paying off theirs, “we do not have any alarm bells ringing right now”.

“Obviously you will have one or two people talking about it here and there. But it’s the bank’s responsibility to go out there and explain to the customer that you have taken the funds, you need to return it.

“And it’s not about returning the funds to the bank. Actually, it is the fund which has been provided by the government of Fiji so, it’s your taxpayers’ money,” Mr Minam said.

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