The Fiji Development Bank (FDB) is committed to safeguarding borrowers from financial distress through its home loan products, addressing ongoing concerns about low-income families’ ability to manage rising living expenses. Kinijoji Bakoso, the FDB Manager of Marketing, Events, Communications, and Customer Advocacy, emphasized that the bank enforces a strict 40 percent commitment ratio. This means total loan repayments must not exceed 40 percent of a borrower’s gross monthly income. By adhering to this guideline, the bank aims to promote responsible lending and reduce the risk of over-indebtedness.
For instance, a household earning $12,000 annually could qualify for a loan of up to $60,000, with a repayment limit set at $400 per month. This policy theoretically allows families to retain around $600 for other living expenses. Bakoso acknowledges the challenging nature of living on approximately $150 weekly, yet reinforces that this framework is intended to foster financial responsibility among borrowers.
Recently, the bank introduced the Choice Home Loan, which will undergo a review after six months to evaluate its effectiveness and meet customer needs. Additionally, the FDB is offering unsecured loan options tailored for rural families who may lack land titles, providing crucial support for home improvements and family welfare.
In response to criticisms regarding interest rates, Bakoso explained that the bank relies on bond funding instead of customer deposits, which impacts pricing. This funding model enables the bank to continue its support for low-income and development sectors. Bakoso assured that prospective borrowers receive clear explanations of all loan costs, including fees and repayments, before finalizing any agreements.
Overall, the FDB is actively working to navigate the challenges faced by low-income families, offering flexible solutions designed to empower borrowers while monitoring their financial well-being.
Leave a comment