Ariel view of Suva City.

The Minister for Economy today moved a motion for a Government guarantee of $170m for the Fiji Development Bank.

The motion if passed will see the Bank pay a guarantee fee of 0.075 percent on the cumulative utilized guarantee credit.

Minister Aiyaz Sayed-Khaiyum says the guarantee will enable continued facilitation and implementation of government policy by lending to the essential sectors of the economy.

“Particularly resource-based sectors including agriculture, mining and quarry, manufacturing, transport, communications and storage, small and micro enterprises in wholesale and retail for hotels, and professional business services which will assist Fijians to earn a decent livelihood and of course that is a challenge in respect of what is happening given COVID-19.”

Sayed-Khaiyum says the motion if approved will ensure that the Bank lends to resource-based sectors to develop agriculture and in the long run to help the Fijian economy.

“The banks borrowing are guaranteed by the government, therefore, reducing the perceived risk associated with such borrowings. This will make the bank’s instrument more attractive to investors and reduce the cost for the banks. Given that there’s liquidity in the market, we hope that it will be further reduced.”

The Minister of Economy adds that this will assist many Fijians who have been affected by the pandemic both in the formal and informal sectors.