26 Jun 2007

Praise for revitalisation of small loans guarantee scheme in Solomon Islands

11:37 am on 26 June 2007

There's praise for the revitalisation of the Small Loans Guarantee scheme in Solomon Islands.

The Central Bank governor, Rick Hou, told the SIBC the new scheme has positive features compared to the previous one.

It includes an option for participating banks to be part of the scheme and the provision of almost 1.5 million US dollars to back the guarantee scheme.

Mr Hou says the minimum amount to be borrowed is 7-thousand US dollars and the maximum of about 145-thousand US.

The maximum guarantee under the scheme is 300-thousand dollars and applicants are expected to pay a one off payment of one percent of the gross amount applied for.

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

Mr Hou says that under the new small loans guarantee scheme there will be no re-financing of the loan and no interest rate subsidy.