Good news for micro, small and medium sized enterprises and large businesses as the Reserve Bank of Fiji has expanded the coverage of the Disaster Rehabilitation and Containment Facility to include them in any lending.
RBF has confirmed that the total amount available under this facility is $200 million.
The RBF states that this is available through approved lenders including the commercial banks, Fiji Development Bank and licensed credit institutions.
They say the interest rate charged on these advances is 0.25 percent per annum and the approved lenders can borrow from RBF at this rate and on-lend to eligible applicants at a maximum rate of 3.99 percent per annum for a term of six months which can be rolled over for a maximum term of up to five years.
This facility is effective immediately and will be subject to ongoing review.
RBF says the scheme provides financing for new loans only and encourages lending to all businesses that meet the eligibility criteria.
They say more than one entity or business within a group can also qualify for funding and one entity cannot borrow from two or more different banks or financial institutions.
RBF states that Government provides guarantee for any defaulted loan under the scheme and the maximum loss guarantee ratio over the total loan amount that can be claimed.
They say the RBF reserves the right to award loan amounts greater than the specified limits under special circumstances, however, loan amounts that exceed the current thresholds would be treated under the standard Disaster Rehabilitation and Containment Facility terms and conditions where the interest will not be subsidised and no guarantee will be provided.
Government will fully subsidise the interest rate payment for the first two years and lending institutions cannot charge any type of fee or charges during the first two years of the loan.
RBF says this means that no interest payment, fees and charges will be paid by any business under the scheme to lending institutions during the first two years.
The maximum interest rate that can be charged to eligible businesses will be 3.99 percent per annum.
They say in order to apply for a loan default claim, the lending institution must provide evidence like the loan has been in arrears for at least 90 days, all reasonable steps have been taken to recover the debt and all claims will be processed and responded to within 3 working days from the date of receipt of application.
Upon approval, the payout of the approved claim will be credited to the approved lender’s nominated account with the Reserve Bank.
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