After weeks of wrangling over the proposed $6.3 million loan by Tongatapu squash exporters, from the Tonga Development Bank, $2 million has been approved.

Squash exporters wanted the loan to be guaranteed by government, in order to compensate squash growers for the zero earning from their squash exports to Japan last year. The secretary of the Tonga New Squash Council, Steven Edwards, said early this week, that government had offered to guarantee a loan of $2 million, the only amount that the Treasury could guarantee without the approval of Parliament.

Steve was optimistic that the loan of $2 million was to be approved by the Tonga Development Bank before the end of the week and a payment of nine seniti per kilo would then be paid out to growers.

Steve said that the rest of the loan of $4.3 million was to be raised later if parliament approved for government to guarantee the loan.

Meanwhile, Simi Sefanaia of the the TDB said that the $2 million loan was still being processed, and how the loan was repaid would have to be approved by the Minister of Finance. Under the proposed repayment procedure government would have to repay the loan if there was a default in repayment.

Steve said that the repayment of the loan would be deducted from the earning of squash growers this year. He said that exporters would negotiate with Japanese importers to include the loan repayment on the price per kilogram of squash they would pay for Tongan squash this year.