Over $6 million dollars in Interest Loss, Subsidy and Expenses is being requested from the Olbiil Era Kelulau (OEK) for Housing Loan Development Program (HLDP) by National Development Bank of Palau and Palau Housing Authority.
Palau Housing Authority is claiming $2,088,975.28 dollars reimbursement for subsidies and interest losses incurred in administrating 73 housing loans worth over $4 million dollars. Under RPPL 10-36 Housing Loan program, Palau Housing Authority will provide $10,000 in subsidy per applicant and charge customers 1-3% interest for a housing loan of up to $60,000. Interest losses incurred by charging less than its current interest rate is to be paid by the government through OEK appropriation.
NDBP, also authorized to implement the HLDP, can request reimbursement for losses and expenses it incurs in the processes of implementing the loans. It has submitted its request for reimbursement of $3,968,191.71. Interest loss means charging customers less interest than the normal rate charged by the bank. In this case, the bank is allowed to charge no more than 6% percent whereas its current rate is more than 6%. The difference than is posted as interest loss and according to RPPL 10-36, OEK will appropriate funds to reimburse these losses.
Under RPPL 10-36, these costs will be reimbursed on “as needed basis” through appropriation from OEK. Funds were not appropriated under the FY 2020 budget and therefore, will need to be included in the upcoming FY 2021 budget.
According to the last report made on HLDP, the entire $15 million dollar housing loan from Mega International Bank has been implemented and disbursed by NDBP and PHA. It was also reported that more housing projects are pending in both agencies awaiting funding.

Leave a comment

Your email address will not be published. Required fields are marked *