Parliament unanimously passes motion to guarantee $130m loan for FDB

Parliament unanimously passes motion to guarantee $130m loan for FDB

By Rashika Kumar
Friday 15/03/2024
[Image: Parliament of Fiji]

The Parliament has unanimously passed the motion that the government guarantee a $130 million loan by the Fiji Development Bank for 12 months period from 1st March this year to 28th February next year and the bank pay a guarantee fee of 0.075 percent on the cumulative utilized guarantee.

While tabling the motion, Deputy Prime Minister and Minister for Finance, Professor Biman Prasad says this means that if there is a default in repayment by the FDB then the government will have to pay the $130 million but the bank has never called on the government to honour its guarantee and it continues to pay the guarantee fee.

Professor Prasad says the total debt guarantee by the government is $1.02 billion or 7.03 percent of the GDP.

The Deputy Prime Minister says according to the bank’s audited financial statement as at 31st December, 2023 recorded a total loan portfolio of $482.73 million representing 8,561 accounts of $371.04 million in the focus sector.

While speaking in support of the motion, Deputy Prime Minister and Minister for Tourism and Civil Aviation and Education, Viliame Gavoka says this will provide finance for the development of the country.

He says we all want the bank to succeed for both who manage the bank and those who borrow.

While supporting the motion, Leader of the Opposition, Inia Seruiratu says he fully supports the motion as it is regarding development but he wants the government to seriously think of good policies.

He says they had a long discussion with the Deputy Prime Minister on this and has also responded to the request by the Prime Minister’s Office and the Office of Foreign Affairs to be part of it or have consultations with the consultant who is here on one of our foreign policy, the white paper.

FijiFirst MP Faiyaz Koya says the FDB for many years has formed a huge part of the life of MSMEs and continues to do so.

Koya reminds Professor Prasad to remember them during budget time because they do form a huge part of the economy

In his right of reply, Professor Prasad says the government has worked with the FDB to strengthen its reach to agriculture, SME and MSME’s.

He says in the last financial year, the bank dispersed $40 million worth of loan to assist MSME and the agriculture sector.

The Deputy Prime Minister says the women’s loan portfolio represents about 28.6 percent of the banks overall loan portfolio.

He says the bank has recorded a substantial decrease in the non-performing loans by 30.2 percent or 4 times more compared to the previous financial year.

He has clarified that 75 percent of the iTaukei population are not living in poverty but says that 75 percent of the total number of people living in poverty are iTaukei.

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