Lending Policies and Guidelines

Function
The function of the Bank is to promote the expansion of the economy of Samoa for the economic and social advancement of its people by making loans to enterprises in all development sectors of the economy

Scope of Activities
The Bank will conduct its operations within the general framework of the Government’s economic plan and priorities. The Bank will assist primarily in the private sector and will finance both new and existing projects aimed at increasing production and development in the Agriculture, Industry and Social sectors.  The Bank will not commit to the development of churches and pastors houses.

Development and Operating Policies
The Bank will provide financial assistance to development projects that will enhance economic growth and social development.  The development projects will be assessed relative to the nature, industry, economic, social and environment sustainability.

Diversification of Portfolio
In order to mitigate the concentration of risk, the Bank will seek to diversify its portfolio to ensure an equitable spread amongst the development sectors and geographic locations.

Interest Rates
The Bank will determine from time to time the rates of interest and fees to be applied to its loans in light of prevailing Government policy and developments in the market, with due consideration to the cost of its own borrowings.  The indicative interest rates will range from 8% to 14%.

Debt Equity Ratio
The minimum contribution by the applicant is 35% of the total project cost.

Debt Service Ratio
Generally allowed 1.5times.

Compliance
The Bank is required to comply with the provisions of various legislations, government policies and regulations.

Review
Lending policies and guidelines will be reviewed from time to time in light of prevailing Government policies, cash flow and developments in the market.