In response to the letter from Covid Bank on August 3, 2023, I would like to inform your readers about the loans the Cook Island Government made during the Covid-19 pandemic.
At that time, many businesses were struggling to
continue trading due to the losses they were facing from the border closure.
They needed a life-raft, and fast. The Cook Islands Government provided this
rescue with a range of supports, of which the Business Continuity Credit
Facility (BCCF) is one.
The BCCF was established as a collaborative loan facility between the Government and the Bank of Cook Islands (BCI). The Government approved and financed the loan facility, and since then BCI has been administering the repayments of the loans. The role of banking was contracted to BCI, a bank.
At the time, the Government lent $6.9 million to 151
borrowers, all Cook Islands companies. It was our intention to provide a
low-cost, low-stress source of finance at a very stressful time for our
businesses. Our businesses are now beginning to recover, so we expect to see
improved ability to repay those loans. We have not seen these businesses fail; our
As at 30 June 2023, the status of the $6.9 million
lent out under the BCCF is as follows:
Total repayments (in principal and
interest) by 30 June 2023 was $821,507
There are 123 loans still being paid off
by borrowers. Those loans have a balance of $4,369,556
Of the 123 loans, 47 loans (38%) are
behind in their payments. 27 companies are behind in their payments by more
than 181 days.
The total amount of late payments due is
BCI reports to MFEM quarterly on the repayments they
have received and which loan payments are late. BCI also manages collections of
debts. If readers wish to find more information, there will be a release on the
MFEM website soon.