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CDA lifts moratorium on direct loans
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Posted on May 06 2005
More than $1 million has been identified as available for lending, after the Commonwealth Development Authority lifted Thursday the five-year moratorium on direct loans.
According to CDA, 50 percent of the available funds was allocated to commercial loans of over $25,000 while another 30 percent was budgeted for commercial loans amounting to $25,000 and under.
The remaining funds are being put aside for marine and agricultural loans.
CDA announced that it will start accepting applications for new loans starting June 1, 2005.
The moratorium was put in place in 2000 due to delinquent loan payments resulting from the 1997 Asian economic crisis.
In an interview yesterday, CDA chair Sixto Igisomar said the board of directors has been considering the possibility of lifting the loan moratorium for the past two years.
He noted that before former CDA chair Juan S. Tenorio’s term expired two years ago, the agency conducted a small loan program that resulted in the distribution of loans totaling $300,000.
“We accumulated up to $700,000 from our collections for the past two years and it now finally reached $1 million. We’re thinking it would be enough for now to give out to the community and assist [people’s businesses]. So this money has been with us for a while, but we never released it because we were fine-tuning at the Development Corporation Division,” Igisomar said.
Aside from lifting the loan moratorium, the CDA board of directors also approved on Thursday a reduction in interest rates.
CDA lowered its interest rates for commercial loans from 9 percent to 7 percent, and for fishing and farming loans from 5 percent to 4.5 percent.
Igisomar said the rate reduction was made possible by the moratorium lifting, which is expected to infuse new income into the agency.
“CDA clients with currently higher interest rates are encouraged to come in to find out if or how they can qualify for a lower interest rate,” CDA said.
In related news, the authority is set to propose amendments to CDA rules and regulations. The amendments would address term extensions, refinancing requirements, bank guaranty agreement conditions, insurance requirements, and other proposed improvements to the current regulations.
