Excess funds

Timoci Gaunavinaka, Waila, Nausori | Wednesday, May 31, 2017
Our $727 million excess funds causing a rise in liquidity and may be because of decrease in lending can be initiated by many factors. Dr Neelesh Gounder of USP has correctly pointed some of the potential factors.

The inability of banks to find eligible borrowers is assumed to be a contributing factor to the buildup in our excess funds.

As a developing nation with an abundance of resources in both physical and human including an educated workforce shows that we have no shortage of opportunities for economic progress.

To some extent, banks may need to do some "practical research" to assess the viability of their criteria in determining who is an eligible borrower.

How many times have we seen some hardworking, down-to-earth and dedicated citizens who have built some small things out of nothing been denied loans because of some criteria ineligibilities? Yet, some sweet talking neatly dressed "pretenders" been given big loans just to start and collapse their businesses.

I believe some loan officers in Fiji's banking industry have never run a successful business. I believe many of those who do training in micro-finance have never run a successful business. So on whose practical experiences and proven theories are these borrowing eligibility criteria based upon?

If 1 + 2 does not equal 3 then there is nothing wrong with 1 or 2, but with our own calculation. It is no use trying to find out if 1 is really a 1 or if 2 is really a 2. If our method of calculation is wrong then the answer to a particular equation will always be wrong.

Likewise, if we have all the ingredients for economic progress and fail to achieve economic progress at certain levels, then there is something wrong with our method at that level. It is as simple as 1 + 1 = 2.

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