The difference between a grant and loan

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Dear Editor,

I could be wrong but here’s my own re-write of the Samoa Agriculture Competitiveness Enhancement Project, funded by the Ministry of Agriculture and Fisheries for clarity. 

Grant- is money you can keep.

Loan: is money you have to return. 

If $10,000.00 is the total amount of money allocated for the Agriculture Competitiveness Enhancement project than $5,000.00 of that $10,000.00 is a grant (don’t have to pay back) $3,000.00 is a loan (you do have to pay back) and $2,000.00 is in kind or I’d rather say the farmers sweat is worth $2,000.00. Total of this part grant, part loan and part sweat is $10,000.00. Let me simplify it more.

You get $5,000.00 as a grant. 

They loan you $3,000.00 which you have to pay back so out of the $5,000.00 you give them back $3,000.00 leaving you with $2,000.00 for your sweat. 

Fair enough, so out of the $10,000.00 all you got was $2,000.00 for your sweat? Why didn’t they stop the mathematical ping pong and just say you’re getting a $2,000.00 grant? Call me crazy or we still have a misunderstanding?

 

Michael Uhlia 

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