MERCHANT Finance Pte Limited (MFL) and the Ministry of Itaukei Affairs have signed a Memorandum of Understanding (MoU) aimed to provide payments of interest subsidy by the Government for loans provided by Merchant Finance to resource owners in the country.
Permanent Secretary for itaukei Affairs Pita Tagicakirewa said such partnerships with private sector players were crucial when creating economic opportunities for iTaukei business owners.
“This agreement will enable MFL and the iTaukei Affairs Ministry to complement ongoing economic development initiatives for resource owners while improving access to finance services and products for indigenous entrepreneurs,” Mr Tagicakirewa said.
Additionally, the MoU will allow MFL’s Vanua Finance to manage the government’s approved interest subsidy scheme, which is designed to alleviate financial constraints and encourage investments in sectors like land subdivision, resource extraction, revenue generating activities in the tourism sector and commercial property investment.
A recent statement highlighted that this will provide iTaukei-owned business with access to financing under favourable terms such as reducing borrowing costs and enhancing long term sustainability.
The statement adds that from July 2024 to December 2024, Merchant Finance has financed 104 iTaukei owned businesses with loans of $11m.
“Out of these, 19 loans fall into the focus areas of Vanua Finance where Government was requested to provide interest subsidies.
“To date, seven loans under the interest subsidy requests have been approved, totalling $329,217.63.
“Comprising of four land subdivision projects supplying a total of 90 lots, one renewable energy initiative for solar-powered refrigeration and cooling systems for a village store based in the province of Lau and two tourism development projects aimed at enhancing local economic opportunities for their communities,” it stated.
Merchant Finance is currently awaiting approval for the December 2024 submission to Government for the remaining 12 loans and is also working on the March 2025 submission for the next batch of customers.
Merchant Finance and the Ministry have further reaffirmed their commitment to the effective management of the subsidy funds.
Regular reporting, monitoring and evaluation mechanisms are in place to track progress and measure the interest subsidy initiative’s impact.
