Interest rates should be thoroughly assessed prior to approving loans. This was one of the recommendations by the Finance and Expenditure Parliamentary Committee.
Deputy Chair, Faumuina Tiatia Liuga, moved for the Committee report with recommendations on the Annual Report of the Development Bank of Samoa to be approved by Members of Parliament.
Minister of Finance, Sili Epa Tuioti read out the Government’s response on the Finance and Expenditure Committee’s report.
The recommendation was for the committee to reconsider interest rates for farmers and private business.
“So that repayments can be made as well as thoroughly assess approving loans to risky debtors which have high chances of being written off.”
The Minister noted the interest rates imposed on loans are dependent upon the interest rates where the funds are provided.
“Interest rates offered to the public range from 11% to 16% for different development and reasons.”
“It was only when the D.B.S. received lower interest rates and loans from the National Bank of Samoa, that the D.B.S. was then able to offer interest rates of 8% to its clients.”
“This 8% interest remains right throughout the term of the loan.”
“The Corporation also considered the time frame the clients can afford to make repayments, to ensure that both the client and the Bank are safe,” explained Sili.
Another recommendation was to consider referring the Development Bank of Samoa to the Ministry of Commerce, Industry and Labour.
Sili stated the recommendation is noted and will be considered for improvement and development of the D.B.S.
Furthermore the Committee noted the need to utilise government land where Medcen Hospital is located for another development so that the outstanding loan of 2.5million can be cleared.
The Minister of Finance pointed out the Board and the D.B.S. should continue to prioritise this work to ensure the loan is cleared.
“There are announcements and advertisements for interested individuals or companies to buy or lease the land to earn money so that the loan can be paid.”
In May, 2017 the Development Bank of Samoa re-advertised the property for sale or as lease-to-own.
According to the advertisement at the time MedCen building, is ideal for business development and located on Government-leased land at Vailima opposite the U.S. Embassy.
“Available for sale or lease-to-own over a period of 20 years ($2.1 million O.N.O.).”
Last October, the Development Bank of Samoa (D.B.S.) invited expressions of interest to purchase the MedCen premises for $2.1million [US$890,000] or for the nearest offer. The proposed sale is the latest move in the long running saga of MedCen Hospital, Samoa’s first private hospital which was opened in 1998.
Before the launch, a keen supporter of the project, the Pacific Islands Investment Facility (P.I.I.F.), promised the hospital would “upgrade standards, relieve pressures on the public system, incorporate special programmes to bring benefits to the wider community, save foreign exchange, and by providing improved health care, support increased tourism and foreign investment.”
The dream was realised in December 1998. With the backing of 22 Samoan and American Samoan shareholders, MedCen opened its doors for business and was headed by Le Mamea Dr. Emosi Puni and Leo’o Dr John Adams.
But several years ago, the hospital ran into financial problems. The Development Bank then moved in and took over the assets and equipment. The Bank was MedCen’s biggest creditor, and had poured $2million into the project.
The facilities at MedCen at that time were up to par with international standards, especially when it gained I.S.O. certification in 2003. In its heyday, MedCen Hospital had resident doctors, consultants, nurses, midwives and visiting specialists, supported by a well-equipped laboratory, x-ray and ultrasound facilities.
But all that is now a thing of the past.