Senators question status of $200K for Manu'a economy
The Manu’a island group has been allocated what two senators are calling a first time huge financial benefit from the territorial government — $200,000 to help business development in Manu’a as part of the Lolo Administration’s efforts to boost the territory’s economy.
The money is part of the $1 million allocated to the Development Bank of American Samoa (DBAS), for business loans, included in the fiscal year 2014 budget with the goal to create new jobs.
With six months left in FY 2014, senators questioned the status of this money, prompting Sen. Galeai Tu’ufuli as, chairman of the Senate Government Operations Committee, to hold a hearing last Thursday with DBAS acting president Ruth Matagi-Fa’atili, as the sole witness.
Asked about the status of the $1 million, Matagi-Fa’atili told senators that DBAS had just received early last week about $600,000 from the local government, and before the money was received in the bank’s account the board had already prepared to set aside $400,000 for Tutuila and $200,000 for Manu’a.
She says the next step now is for the board to work on the plan, which includes criteria and guidelines for applicants to receive this money. She added that the board also plans to make sure that everyone gets a piece of this financial assistance.
According to the acting president, the board wants to make sure that the money is useful in business development — either to improve current businesses or establish new ones, but again she emphasized that the guidelines and criteria have yet to be set. She also said that no one has applied for this money yet.
Sen. Soliai Tuipine Fuimaono asked about the bank’s action taken on a person whose first business has gone bankrupt, and who is again applying for a business loan. Matagi-Fa’atili responded the bank will look at among other things, financial statements and collateral.
Manu’a Sen. Laolagi F.S. Vaeao said the FY 2014 budget was signed into law in early October of last year, and the bank should already have in place plans and criteria for who qualifies for such a loan. “True, you’ve just received the money now, but it’s six months since the bill was signed into law, which includes the money, but still there are no plans in place,” he said.
He added, “By now, advertisements should have been put out to the public about this money — who qualifies for it and how to apply”.
Matagi-Fa’atili responded that a plan also calls for marketing the program, so that people would know that such funds are available.
Laolagi suggested that a provision be included in the guidelines that Manu’a residents seeking to have a piece of the $200,000 for Manu’a should be required to build the business in Manu’a, not just Tutuila.
Sen. Afoa Su’esu’e Lutu pointed out that many people from Manu’a reside on Tutuila and therefore the island group lacks sufficient clientele. He recommended the board, when it comes to Manu’a, look at “practical” business development such as farming.
Toward the end the hearing, Galeai — another Manu’a senator — said this is the first time for Manu’a to receive such a large benefit from the territorial government and he will write an official letter to the bank and the board.
He also said that maybe it's time for him to move to Manu’a to set up a business there along with Laolagi. However, Sen. Tuiasina Esera pointed out that there are not many people living in Manu’a now — as they are all on Tutuila.
In allocating this money for business loans, Gov. Lolo Matalasi Moliga said last September that the current restrictive lending policies of the commercial banks have limited the ability of local people to participate in their own economic development.
“This perpetuates the current trend of foreign dominance of the private sector,” he said. “In order to accelerate the creation of jobs and to increase local ownership of businesses, local entrepreneurs need to access venture capital.”
The governor said the fund earmarks attempts to stimulate economic activity in the private sector by making venture capital finance loans available through DBAS. “This will increase DBAS’ capacity to issue loans to locally owned businesses,” he added.