Minister for Economy Aiyaz Sayed-Khaiyum has today tabled a motion in parliament for the government to guarantee $170 million for the Fiji Development Bank.
While tabling the motion, Sayed-Khaiyum says the 2021 government guarantee request from the FDB will enable continued implementation and facilitation of government policy by lending to essential sectors of the economy.
He highlighted that the FDB will pay a guarantee fee of 0.075% on the cumulative utilised guarantee credit.
Sayed-Khaiyum says as at 30th June 2020, the FDB had 4825 loan accounts with an accumulative loan portfolio of $541.88 million.
He says in line with the Fijian Government’s mandate, the number of loan accounts in the agriculture sector constitutes 62.22% of the total loan accounts.
Sayed-Khaiyum says in summary, the focus sector represents 81.6% of the total number of loan accounts and 41.19% of the total value of the bank portfolio.
The Attorney General says as at 30th June 2020, the bank recorded an operating profit after tax of $1.14 million which is a drop by $2.92 million for the previous period.
He says the total assets of the bank stood at $540.57 million which is a drop by $5.04 million. Sayed-Khaiyum says the bank’s borrowing request averages around $160 million for the last three calendar years.
He adds the bank’s total forecast inflow for 2020 is $78.63 million and requires an additional $170 million to finance the total outlay of $248.63 million.
Debate continue on the motion.
SODELPA MP Aseri Radrodro says the government guarantee for the Fiji Development Bank had expired in February, 2021 and what is disappointing is that someone or some people at the FDB slept on the job and failed to note that there are certain requirements that need to met which requires parliamentary participation.
While supporting the motion that government guarantee for the 12 month period from 1st March 2021 to 28 February 2022 (Guarantee Period) for the Fiji Development Bank, government guarantee a sum of $170 million for the guarantee period and that the bank pay a guarantee fee of 0.075% on the cumulative utilized guarantee credit, Radrodro says he understands the Minister for Economy Aiyaz Sayed-Khaiyum was on medical leave and it is not necessary for him to provide oversight over such fiduciary functions.
Radrodro further says the FDB had ample time to bring notice to government that this guarantee needs to be reviewed.
He adds that people who sit on the board of FDB have a fiduciary duty to ensure that the bank do not operate without a proper government guarantee.
Radrodro raised the question on how does the bank ensure that the benefits of these guarantees goes down to the farmers, fishermen and businesses who help in the development of Fiji.
He says while Fiji is under the COVID-19 pandemic they suggest to government that FDB initiates financial loan packages to assist those farmers, fishermen and businesses in need of capital to grow their businesses.
Minister for Economy, Aiyaz Sayed-Khaiyum will give his right of reply later today.
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