The Reserve Bank of Fiji has announced a reduction in the lending rate for businesses that access funds under its Import Substitution and Export Finance Facility (ISEFF).
The reduction comes into effect from March 1, 2013; the maximum interest rate charged to eligible businesses will be lowered to 5 percent from 6 percent per annum as the new change is applicable to all new ISEFF loans.
RBF Governor, Barry Whiteside said, “Reducing the ISEFF interest rate is timely and reflects the general downward trend in domestic interest rates and further supported the objective of the Facility to provide loans at a concessional rate.
He further added that the lower concessional loan rate is expected to boost demand for ISEFF funds and contribute towards Fiji’s balance of payments position.
The change was necessary according to RBF to ensure that the Facility is attractive as the average commercial bank lending rate had fallen to 6.7 percent.
Moreover, RBF has allocated a total of $80 million to be lent out under this Facility of which more than $30 million have already been lent out to eligible businesses through various financial institutions.
By Indrani Krishna