DBAS Writes Off Unpaid 10yr old Loans

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Development Bank of Amerika Samoa (DBAS) President, Ruth Matagi-Fa’atili told Fono leaders today that it’s okay that the bank has been operating on a loss for several years, saying as long as DBAS is serving the community with the programs it has.

She said when she became president, the bank was already operating on a loss.

The DBAS President appeared along with the bank’s board Chairman,  Senate Vice President Nuanuaolefeagaiga Saoluaga Nua in a hearing called by the House of Representatives’ Commerce and Economic Development Committee chaired by Rep. Larry Sanitoa on Wednesday.

The DBAS President was under scrutiny with questions and inquiries from committee members covering several issues pertaining to the bank’s operation including the recent loan of $2 million from the ASG Retirement Fund.

In regards to the overall operation of  DBAS, House committee members were concerned with the fact that the bank has been operating at a loss for several years now.

One of the problems the president identified is loan delinquency.

Matagi-Faatili revealed during the hearing that all loans that have not been paid off after ten years have been written off.

She indicated that the bank cannot do anything and that collecting on the loans is out of its reach.

Regarding the $2 million DBAS borrowed from the Retirement Fund, Ruth said they are going to try and lend the money out with hopes of increasing their interest income.

She said DBAS was hoping it would be charged a 5% interest rate for the loan but it got a 7.5% interest.  So the bank, in an effort to make a good profit, is lending at 8.59% interest.

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