VT927M banking facility not subject to politicisation: Deputy PM

May 26, 2026 9:38 pm | Posted in Business News | Share now TwitterFacebook

By Anita Roberts.

The VT927 million banking facility for the production sector will not be subject to political interference, as it will be administered by participating banks and not government departments or ministries.

The Deputy Prime Minister and Minister of Finance, Johnny Koanapo, said this in Parliament after a concern was raised about ensuring farmers benefit from the facility, rather than it being politicised as in past experiences.

“It must be made clear that there are farmers and business people in this house (Parliament), and we cannot discriminate by saying that politicians should not have access to the funding,” he said.

“Yes, there is a lot of talk about politicians abusing such opportunities, but this time no government ministry will administer the scheme. It will be placed directly with the banks, which will follow their own processes to screen applicants. So, politicians can access the funds as long as they meet the required criteria, but assessments will be done by the banks.

Parliament yesterday endorsed the motion for the government to grant the VT927,280,000 indemnity, which will be kept by the Reserve Bank of Vanuatu (RBV) and then allocated to interested banks based on their policy rules.

Businesses and farmers can apply for credit at no more than 5 per cent interest rate. Each bank will carry out normal due diligence and rigorously assess each loan application, including clients’ ability to repay the loan.

Deputy PM Koanapo said the banks must fully disburse their allocations within six months after confirmation, and if a bank does not utilise its allocation, the Government will review and reduce it.

Eligibility will be assessed by each bank on a case-by-case basis based on cash flow, business plans, and repayment ability, with guidance from the Government through the Ministry of Finance and Economic Management (MoFEM), and the arrangements will be formalised with the banks, he said.

According to the Deputy PM, the Government will cover the interest for the first 12 months, and applicants will then pay for the remainder of the loan period.

He said the banking facility is not intended for restructuring or refinancing loans, but to provide quick cash support to businesses with potential that are struggling, and those wanting to invest in new areas.

“The facility is designed to promote economic stability and recovery by supporting businesses’ cash flow and working capital needs, using government funds to provide below-market interest loans that help sustain businesses, stimulate production and investment, and promote economic sustainability,” he said.

Deputy PM Koanapo said the Government considers the risk of providing the banking facility to be low compared to the potential benefits of promoting economic stability and growth.

He added that the National Bank of Vanuatu, which has presence across the country, has already shown interest in participating.