Applications piling up for microloan

The Commonwealth Development Authority is currently swamped with loan applications from small-scale businessmen hoping to secure funds under the agency’s Microloan Program, Board Chair John S. Tenorio said yesterday.

The government’s lending arm is now processing 15 microloan applications from local entrepreneurs, while more applications are anticipated to come in the next few weeks, amid the program’s already depleted coffers.

Mr. Tenorio said the huge turnout in the Microloan Program as well as the pile of pending applications should facilitate the approval of CDA’s request for additional funding from the United States Small Business Administration.

Over $300,000 worth of credit packages have already been approved by the government’s lone lending agency since the Microloan Program was introduced late last year.

The Microloan Program was launched late last year to help stimulate the Commonwealth’s slumping economy by assisting small businessmen obtain fresh and additional capital for either new or existing businesses.

“We are anticipating more applicants for our Microloan Program and these applications should justify our request for additional funding from the SBA,” he told reporters in an interview.

Mr. Tenorio said CDA is asking SBA for at least $500,000 in additional funds to meet the need for start-up and expansion capital by Northern Marianas entrepreneurs.

Still within its first year, CDA has approved the loan application of close to 15 small businessmen involving more than $300,000 and Mr. Tenorio said CDA is anticipating numerous applications to come in which warrant the need for additional funding from SBA.

The Microloan Program, a partnership between CDA and the SBA, was established to help small businesses cope with economic difficulties. SBA loaned some $330,000 to CDA for the program.

Under the program, small businesses can obtain as much as $25,000 in fresh loans. CDA is the first microlender in the Western Pacific although talks are already underway for the SBA to extend the program in other Micronesian islands.

The Microloan Program is expected to offshoot the slowdown in lending activities undertaken by private commercial banks due to economic downturn which virtually dampened capabilities by borrowers to repay loans.

CDA is the only government agency which grants all types of loans to local residents of the Northern Marianas at interest rates lower than what are offered by commercial financial institutions.