An Implementation Agreement for the extension and expansion of the Government Development Loan was signed on October 1 by the Chief Executive Officer of the Ministry of Finance, Balwyn Fa’otusia, and the CEO of tge Tonga Development Bank (TDB), Leta Kami. The scheme will run for another five years up to 2025.
The Ministry of Finance stated that the Government Development Loan (GDL) scheme was established in August 2014 with $13.05 million, which has been managed successfully by the TDB on a revolving basis over the last six years, 2014-2020.
They said the objective of the GDL scheme was to foster development and economic growth in Tonga by supplementing budget priorities, expanding domestic value-added products, promoting new businesses, supporting investments in rural areas and outer islands, promoting small scale and family owned businesses, and supporting particular needs of the market.
“An independent review of GDL has been conducted with positive findings on targeted sectors and their contributions to Tonga’s economic and social development. Over 3,000 beneficiaries have utilized this opportunity. Due to overwhelming support by the private sector and borrowers, it was recommended to extend the GDL scheme to provide loan opportunities for another five years.”
Government has approved an additional $5 million to assist with recovery and development of the Tongan economy due to the impact of Covid-19 pandemic and Tropical Cyclone Harold, especially in the fisheries and tourism sectors.
The statement said that the GDL scheme will continue with a low interest rate of 3% for priority sectors including Agriculture and Forestry, Fisheries, Tourism, Education and other sectors.
“Loan applications and detailed information are available from TDB. A joint program will be conducted by the Ministry of Finance and Tonga Development Bank soon to provide further information and promote awareness on GDL.”
Government acknowledged the hard work and the collaboration with TDB in implementing the GDL and looked forward to a closer and stronger partnership with the Bank in the next five years, they said.