Central bank boosts flood loan facility

July 24, 2009 04:47:25 PM

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The Reserve Bank of Fiji this week announced measures to make its Flood Rehabilitation Facility (FRF) more attractive, with just under four percent of available funds advanced to eligible businesses so far since the facility was set up in April.

“Following a review of the FRF guidelines, three important changes have been made to make the facility more attractive to eligible businesses,” the central bank said in a statement.

Effective from yesterday, the three new changes include:
*    Lending under the facility extended from three years to a maximum of five years;
*    Businesses no longer being required to apply for a rollover as loans will be automatically rolled over every six months based on the initial term of loan approved by the commercial bank. However, interest owing will continue to be payable at each six month interval from the drawdown date; and
*    Availability of the facility has been extended to December 31, 2009.

RBF established the facility in April to assist businesses affected by the floods earlier in the year to obtain credit at concessional interest rates.

A total of $20 million is available under the facility, of which $700,000 has been advanced to eligible businesses to-date, according to the RBF.

The FRF is also accessible from the Fiji Development Bank and licensed credit institutions including Credit Corporation Fiji Limited, Merchant Finance & Investment Company and Home Finance Company.

In announcing the policy revision, RBF governor Sada Reddy called for the banks and other financial institutions to be supportive of loan applications made for reconstruction and re-establishment of businesses after the severe flooding early this year.