The Kiribati government is facing criticism for borrowing more than 6 million US dollars from the Kiribati Provident Fund.
The money has gone to Air Kiribati partly to cover the cost of a new plane.
The opposition has attacked the loan, saying the funds belong to the employees and the government should consult them before withdrawing their money.
But the communications minister, Rimeta Beniamina, says the workers will benefit as Air Kiribati is to pay six percent in interest.
He says the monthly repayments are nearly 70 thousand US dollars.
The Kiribati Independent reports Mr Beniamina has confirmed the money was borrowed in two separate loans and that extensions on the loan repayment periods are being sought.