7 Jul 2007

Low response to Marshall's micro-loan programme

8:30 am on 7 July 2007

The Bank of Marshall Islands is to change loan policies for it's Taiwan-funded 'micro-loans' programme and step-up isolated community outreach programmes following a drop in the number of loans issued.

Taiwan pledged 800-thousand US dollars to the Marshall Islands a year ago for the first micro loan program, but more than 500-thousand dollars is is still sitting unused.

The micro credit scheme, operated by the Bank of Marshall Islands, requires borrowers to have a salary from which biweekly deductions can be made directly to the bank for loan payments.

Although the Bank reports it has had an almost 100 percent repayment success rate, the paycheck collateral requirement is also proving to be the main stumbling block to broader use of the micro loan funding.

Since September last year, 64 loans worth over 250-thousand dollars were issued but only 15 of those have been issued this year.

Bank chief executive officer, Patrick Chen, says they're involving the Taiwan agriculture technical mission to help ensure farmers who don't have loan collateral are able to repay small loans.

He says bank officials have also been visiting dozens of small commercial farms in Majuro and islands in Arno Atoll to provide more information to interested farmers.

The average loan is three-thousand 992 dollars and is being provided for projects like the production of noni juice, and coconut oil soap and lotions.