RBF Help for Flood Affected Businesses

Following its announcement of a Flood Rehabilitation Facility in an RBF press release dated 27/2/09, The Reserve Bank of Fiji has today (01/04/09) announced the implementation of the facility proper. The facility is aimed at businesses affected by the recent floods by providing low interest paying loans. The facility is worth FJD 20 million, maximum interest charged is 6 percent per annum and the loan term is a minimum of 6 months with the possibility of extension.

Businesses may apply for funds for the following reasons:

• Replacement of flood-damaged inventory;
• Loss of sales (including working capital) due to the flood;
• Repair or replacement of flood-damaged plant, machinery and equipment;
• Restoration of flood-damaged buildings including resorts and hotels;
• Replacement of vehicles damaged by the flood.

For interested businesses, further information can be obtained from the Fiji Development Bank, commercial banks in the country or The Reserve Bank of Fiji.

Non-Resident Borrowings Relaxed

The RBF has announced the relaxation of the local borrowing by non-resident companies.
The non-resident controlled companies can now have access to more borrowing from commercial banks and other lending institutions. The relaxation of this policy means that non-resident companies can now borrow up to a certain percent locally based on the debt-to-equity ratio. The guideline to this ratio is 3:1. This ratio is subject to verification by a chartered accountant.

The conditions for the borrowing are as follows:
§ for 51% - 70% non-resident ownership – can borrow up to 85% local financing;
§ for 71% - 90% non-resident ownership – can borrow up to 75% local financing; and
§ for 91% - 100% non-resident ownership – can borrow up to 60% local financing.

The policy is effective immediately.