Finance Minister Launches Business Finance Scheme

Finance Minister Launches $10-Million Rural Business Finance Scheme

Minister of Finance and Treasury Gordon Darcy Lilo on Friday launched the government’s $10-million Rural Business Finance Scheme to help boost economic activities in the rural Solomon Islands.

The scheme which is one of the government’s first major financial assistance to rural people under its Bottom-Up-Approach policy is jointly administered by the government and two commercial banks – the ANZ and the National Bank of Solomon Islands.

“The scheme is designed to increase access to loans by individual Solomon Islanders operating or intending to run small to medium businesses in areas such as agricultural production and processing, timber and wood industries, fishing, tourism, manufacturing, retail trade, professional services and transportation,” Mr Lilo said.

Under the current arrangement, funds allocated for the scheme will be channeled through the commercial banks which will assist intending borrowers to obtain loans.

The scheme guarantees 80 percent of the unsecured portion of a loan while the remaining 20 percent will be a trust between the participating banks and the applicant.

Mr Lilo said the decision whether or not a loan application will be financed will be made after procedural consideration by the participating commercial banks.

He said the Central Bank or the government will only ensure feasible business plans get funded.

The Minister urged borrowers to make commitment to borrowing requirements to ensure all projects succeed.

“I expect the borrowers who will have the privilege to be covered under the scheme to repay their loan regularly and manage their businesses properly,” Mr Lilo said.

Mr Lilo said that access to credit facilities plays a very critical role in economic activities.

“The establishment of the scheme will greatly assist many small businesses to get the capital they need to either start or to expand their operations.

Mr Lilo also asked local business houses to establish good relationship with the banks to.

“Banking is about relationship. “I encourage those who will receive assistance from this scheme to use the opportunity to develop good business relationship with the participating commercial banks,” he said.

The minister further urged intending business houses to trade in commodities that are available in the rural areas to ensure economic activities are enhanced and benefits shared more widely.

ENDS

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