Financing for small biz in Western Pacific

MONGMONG, Guam—The USDA Rural Development announced a $750,000 award to the Pacific Islands Development Bank to finance business facilities and community development projects in the Western Pacific, including the CNMI.

Funds awarded to PIDB were made available through Rural Development’s Intermediary Relending Program, which provides a loan to a private nonprofit organization or public entity (intermediary). The loan will be used to fund a revolving account, which in turn will be used to provide financial assistance to ultimate recipients (businesses) involved in community development projects, establishment of new businesses or expansion of existing businesses, and saving and/or creation of jobs in the Western Pacific.

“There are many small businesses in the Western Pacific that need start-up funds or financial assistance to grow and become more viable,” said Lorraine P. Shin, USDA Rural Development state director, Hawaii and Western Pacific. “Due to their small size, geographic isolation, and high vulnerability to worldwide events, many existing and potential small businesses in the Western Pacific lack access to private capital. The sluggish growth of the private sector in a majority of these areas compels these economies to be heavily reliant on the public sector.”

The recent award represents the second award for PIDB under the highly competitive IRP funding source.

“Rural Development recognizes the value in our partnership with PIDB as we are able to reach out to more small, minority-owned businesses in the Western Pacific,” according to Joe Diego, area director for the Western Pacific.

PIDB now has an additional $750,000 more to offer in the form of loans to island businesses across the Micronesian region.

PIDB intends to provide a dollar-for-dollar match to fund the revolving account to re-lend to island businesses, including those geared toward activities such as establishing new businesses, the expansion of existing businesses, creation of employment opportunities and saving of existing jobs.

Rural Development provided PIDB with an initial loan of $500,000 at 1 percent interest to be repaid in 30 years under the IRP. Loans will continue to be made to a variety of small businesses in Guam, the Northern Mariana Islands, the Federated States of Micronesia and Palau.

“From our experience in providing financing throughout the region and based on our Work Plan, we anticipate roughly 75 new loans to be funded resulting in a minimum of 250 jobs created or saved,” said Aren Palik, president/CEO of PIDB.

Further information on rural programs is available at a local USDA Rural Development Office, or by visiting USDA’s web site at http://www.rurdev.usda.gov.