Bank urges defaulters to continue payments
The Development Bank of Samoa (D.B.S.) Chief Executive Officer, Susana Laulu, has urged hoteliers with debts owed to the bank to continue to make payments.
The C.E.O. made the appeal in response to questions from the Samoa Observer, following a recent decision by Cabinet to direct the D.B.S. to defer legal action against defaulting local hoteliers.
“It is important to reiterate that the directive does not in any way remove the obligation of these clients to honour their loan agreements, and to continue to pay the loans,” she said.
Earlier this month, this newspaper reported that the Tourism Minister Sala Fata Pinati wrote to Prime Minister Tuilaepa Dr. Sa'ilele Malielegaoi, asking that the Government intervene and assist "financially distressed" local tourism operators who are heavily in debt.
The Prime Minister was asked to consider the allocation of $20 million to write off principal amounts owed by financially distressed properties to different financial institutions.
The Minister also urged the Government to advise financial institutions to "hold off" on all legal action against the properties while a solution is being worked out.
He said the request which he highlighted in his memo was accepted by the Cabinet.
“The Cabinet has accepted my request to hold off all legal actions and they are considering of $20 million from the Government to write off principal amount owed by the hotels,” he said.
Laulu told this newspaper that the Cabinet directive to postpone legal action has placed the bank in a "very challenging position", while emphasising that the bank's focus is cross-sectoral and not just tourism.
“The D.B.S. will continue to offer this assistance to support economic and social development for Samoa,” she added.