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SBA pledges to provide $1 million grant to NMI
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Posted on Nov 24 1999
The U.S. Small Business Administration has pledged to provide a $1 million grant to the Commonwealth Development Authority in the year 2000 if it can successfully administer the $330,00 loan program sponsored by SBA.
CDA Executive Director Marylou Ada said SBA will make an evaluation based on the demand and needs of the Commonwealth. “They want to see how we run the program, how quickly we dispense the money and what type of projects are we promoting,” said Ms. Ada.
SBA, which usually provides assistance only in times of disaster, has expanded its portfolio through a Microloan Program. CDA will be able to lend money to various small businesses on the island by as much as $25,000.
CDA is the first SBA microlender in the entire Western Pacific, but the agency is studying the possibility of expanding the loan program to other Micronesian islands.
The loan program is meant to serve small businesses which cannot avail of any financial assistance in the traditional credit markets. Primarily, it is aimed at promoting women in business, minorities and people with disabilities.
Ms. Ada has recommended that a 12 percent interest be charged by CDA to the loan recipients, a rate which she said is still competitive since the interest charged by commercial banks is 11.25 percent.
She said the program ensures a number of benefits to the CNMI, which include creation of new businesses, expansion of existing ones, creation of jobs, broadening of the CNMI’s tax base and the diversification of the economy.
CDA has been working to forge this partnership with SBA as part of the CNMI government’s commitment to assist local businesses survive the recession, said Board Chair John S. Tenorio.
Ken Lujan, SBA Guam branch manager, has assured Gov. Pedro P. Tenorio that they will continue to help CDA, the only agency that provides funding service to small businesses at a reasonable rate.
The governor expressed his appreciation to the loan program of SBA and CDA which he said came at a time when people are in dire need for help because of economic recession.
