Increased guarantee to FDB will directly benefit many Fijians, businesses and the economy - AG

Minister for Economy, Aiyaz Sayed-Khaiyum says the increase in Government guarantee for the Fiji Development Bank will enable the FDB to continue to effectively deliver a variety of Government’s socio-economic and lending policies that continues to directly benefit and impact many Fijians, businesses and the economy.

Parliament has approved the increased government guarantee from $170 million to $250 million for the 12 month period from 1st March 2021 to 28th February 2022 for the Fiji Development Bank borrowings through the issuance of short and long-term bonds, promissory notes, term deposits, other short term borrowings and any Reserve Bank of Fiji financing facility; and that a guarantee fee of 0.075 percent be applied on the cumulative utilised guarantee credit.

Sayed-Khaiyum says under the COVID-19 recovery credit guarantee scheme, the FDB has so far approved a total of 3,263 loans to customers with a value of $50.09 million as of 14th September, 2021. These include 1,946 loans in the micro category, 906 loans in the small category, 291 loans in the medium and 120 loans in the large category.

He says three main sectors that make up the 78 percent of the approved loans are the wholesale, retail, transport, and professional business services and the remaining 22 percent are loans to the agricultural, building and construction and manufacturing sectors.

Sayed-Khaiyum says in addition to these approvals, 8,114 applications with a total vale of $139.1 million have been received by the bank and are being processed.

He further told parliament that the FDB has forecast a total of $100 million outlays under the COVID-19 credit guarantee scheme as at 20th February, 2022 and the banks total outlay forecast as at 20th February, 2020 amounts to $397.7 million. He says the banks total inflow forecast for 2021 amounts to $147.7 million which indicates that an additional $80 million is required to finance the total outlay of $397.7 million.

Sayed-Khaiyum says this will cater for the scheme as the existing Government guarantee around $170 million is not sufficient to cover for the new borrowings under the scheme.

He says the additional $80 million Government guarantee request from the bank aims to continue the facilitation of the scheme by lending to essential sectors of the economy particularly resource based sectors including agriculture, mining and quarrying, manufacturing, transport, building and construction, micro, small and medium enterprises, wholesale, retail, hotels and private individuals affected by the pandemic.

Meanwhile, the Minister for Economy also revealed that Westpac, ANZ, and Bank of Baroda have not taken up this facility which has been made available through the Reserve Bank of Fiji where they lend to banks at 0.25 percent.

Sayed-Khaiyum says ANZ and Westpac have the largest share of the market yet they have not participated in it.