Pacific Islands Development Bank Ready For Loans In RMI
By Giff Johnson
MAJURO, Marshall Islands (Marianas Variety, Dec. 10, 2012) – The Guam-based Pacific Islands Development Bank is ready to roll out loans in the Marshall Islands, following completion of all banking approvals locally.
Bank President and CEO Aren Palik on Thursday announced the availability of loans. Pacific Islands Development Bank is a financial institution established by the U.S.-affiliated governments in the Micronesia region, each of which invests $1 million to be members and gain access to loans. The Marshall Islands became a member last year and has paid in $500,000 with the balance expected to be invested in the near future, according to Palik.
These investments, Palik said, open loan opportunities for island residents and businesses.
The bank is offering commercial loans at 10 percent annual interest with an up-to-20-year payback term, housing loans at seven percent annual interest with a maximum payback period of 30 years, and consumer loans at 12 percent annual interest with a maximum payback period of five years.
"We want to emphasize that we are here to compliment Marshall Islands Development Bank and Bank of Marshall Islands, not to compete," said Palik.
PIDB works with the Small Business Development Center that has offices in each of the islands that offer assistance to business people in developing a business plan, which is a requirement of a commercial loan application.
As a result of the bank now gearing to provide its first loans in the Marshall Islands, Palek said that he and bank loan manager Tony John will be making more frequent visits to Majuro to process loan applications.
"I’m excited because there is a lot of demand for loan funds," Palik said. Palik believes that once the bank begins issuing loans it may quickly exhaust the available loan funds, which are now limited to the $500,000 membership investment the RMI has made.
Capitalization of the bank is its biggest challenge and Palik recognized the island governments that, despite difficult economic times, have invested in the bank. He said PIDB takes good care of these investments by issuing quality loans. "We have a low delinquency rate on loans," he said. "We average less than two percent per year. This is important because it is our obligation to protect the investments (of island governments)."
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