$200 million in loans made available to help businesses

$200 million in loans made available to help businesses

By Semi Turaga
Saturday 17/07/2021
[image: File]

The Government has announced that $200 million in loans is available to businesses to meet their working capital needs.

20,000 businesses can be assisted through this.

The Government will pay the interest for the first two years which means the businesses will not pay for the first two years.

The $200 million loan will be made available through the Reserve Bank of Fiji to commercial banks.

Existing micro businesses with turnover less than $50,000 will be eligible for a maximum loan funding of $10,000.

Small businesses with an annual turnover of $50,000 to $300,000 will be eligible for a maximum loan funding of $20,000, while medium-sized businesses with annual turnover of $300,000 to $1.25 million are eligible for a maximum loan of $50,000.

Large businesses with turnover of more than $1.25 million can access up to $100,000 in loans.

Through this scheme the Reserve Bank of Fiji will provide special funding of $200 million at a rate of 0.25% that can be accessed by commercial banks, FDB and other licensed credit institutions.

These financial institutions will lend these funds at a maximum rate of 3.99%.

All of this will allow Fiji’s banks to make these interest-only loans for the first two years.

That means that for the first two years, none of these businesses will pay anything because Government will pay all the interest.

Minister for Economy Aiyaz Sayed-Khaiyum says the beauty is that these loans cannot become bad or default for the first two years, because debt service will always be current.

He says this gives our businesses two full years to stabilize and recover, if necessary, before they start the loan repayments from year three onwards.

It has also been announced that from 1st August 2021, micro, small and medium enterprises with a turnover of less than $1.25 million will pay residential rates for EFL, not commercial rates.

The government will also pay through RBF for the fees for the micro, small and medium enterprises to get on Vodafone Fiji's VitiKart platform.

They will also pay for the monthly fees for corner shops that provide MPAiSA services.

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