The Tongan Government has placed development loans on hold effective 1 March said the Tonga Development Bank (TDB) in a statement. No reason has been given for the suspension of the economic development scheme.

This means Tongans who were planning to start or improve their businesses, study or go for medical treatment overseas by taking out the Government Development Loans (GDL) through the TDB managed fund [2] will have to wait.

The TDB said the GDL are on hold until the government advises the public when the scheme will resume.

The GDL has been popular with low interest rates of 1% or 4% under a set of criteria including short repayment periods between 2 – 4 years.

TDB CEO, Leta Kami said a total of $31.2 million has been lent out since the GDL started in August 2014 up until December 2018.

She said the GDL is a revolving fund with a total of $14.05 million. The GDL fund started at $13.05m and was increased by government by an extra $1 million for agriculture in late 2017.

The loans have helped people / businesses in many sectors including agriculture, fisheries, livestock, tourism, manufacturing, education, retail/wholesale, and women’s microfinance.

The amount of loans varies between $6k to $200k, with agriculture, fisheries, and the tourism sectors taking the biggest share. The lowest are microfinance loans for women at $6k while overseas medical-cover loans are $20k and education loans are $50k.