RBF drops lending rates, banks to pass on to consumers
This came into effect today, where the RBF will now lend to the commercial banks, licensed credit institutions, Fiji Development Bank and Housing Authority at a rate of 0.25 percent.
Previously this rate stood at one percent previously and the lower rate implemented under the facilities will be reviewed after two years.
The central bank says In line with the reduction in the interest rate that RBF charges, the maximum interest rate that lending institutions can charge for on-lending these funds to eligible businesses and households will be lowered from five percent to maximum of 3.99 percent per annum.
This applies to new loans and existing rolled over loans.
RBF Governor Ariff Ali says the reduction of interest rates on the bank’s special lending facilities will reduce the borrowing costs of all businesses and households who have accessed the facility.
He says with Fiji facing a second wave of COVID-19, this should provide some measure of relief in helping reduce the negative impact
Ali says the change is also consistent with the broad reduction of interest rates in the market over the year and the RBF will continue to engage with the lending instuitions in broadening the accessibility of the facilities.
The scheme has a combined funding allocation of $550 million. This comprises of $300m under ISEFF, $150m under DRCF and $100m under housing facility.
To date, a total of $339m in loans has been disbursed under these facilities.
We hope that the banks would lower interest rates based on this great news for the borrowers who have been struggling to meet mortgage payments especially in the West. The rental income for most of these properties in Nadi have declined by 40-50%. This is a time to collectively see how we can all sustain ourselves through Covid-19, says Director of OA Bayshore Fiji Mr. Arif Khan.
Credit: FBC TV
