August 04, 2007 - At this time, the Development Bank of American Samoa needs about $7 million to tie them over the next three years. This is according to DBAS president Utu Abe Malae.
He explained, “This amount will meet the loan needs of entrepreneurs and those wanting new homes or home repairs.” But the primary emphasis is on any industry endeavor that results in exports.
Utu described the collection efforts on student loans as being “slow,” saying that DBAS has collected about $100,000 from 100 repayments so far.
Students are eligible for up to a 50% waiver of the principal if they can verify that they have worked in American Samoa for at least two years.
According to Utu, the student can be self-employed or working for the private sector, and not necessarily for the American Samoa Government.
September 30, 2007 is the deadline for the 1997-2004 recipients of the program. Afterwards, the loans will be in default and referred to the legal department.
The waiver eligibility deadline has been set for December 31, 2007 and details about this are being published in the local newspaper.
As for loan applications, Utu reported that DBAS made a total of 41 loans in 2004, and 161 the following year in 2005.
Last year, the bank made 96 loans and is currently on pace to exceed that number this year.
“DBAS was able to make so many loans in 2005 because of excess capital (investments) that had accumulated from previous years,” Utu explained. “During that time, DBAS was able to help many borrowers who had been waiting years for their loans to be made.”
Right now, there are no new loan programs available to local residents, as the bank is sill awaiting news from HUD regarding the allocation for FY2007, which began July 1, 2007.
Utu said that they expect to announce the HUD HOME program by October, if not sooner, but they are still accepting applications for the Economic Development Revolving Loan Fund (EDRLF) commercial loan program.
When asked about the role of the DBAS board, Utu said that the bank’s board of directors is keenly aware of the difference between governance and management.
“This is demonstrated by their willingness to engage in director training and declining to instruct employees other than the direct report (CEO). Board meeting agendas are carefully prepared; there are no surprises or hidden agendas, or worse, secret ‘executive’ meetings to engage in gossip. Minutes are prepared with an eye toward transparency and accountability,” Utu explained.
“The board is painfully aware from experience that in the future, auditors including the Inspector General may inspect our records including the minutes. The board reminds itself of its fiduciary duties and regularly asks - are we obeying our own policies?” he added.
Utu said that the board members neither instruct the bank attorney to conduct “witch hunts” on employees, nor do they attempt to force the CEO to make bad loans for the sake of political expediency.
“Where separation is required between management and governance, the board allows for its audit committee to communicate directly with the auditors without the presence of the CEO. This is a good practice and protects the integrity of the bank,” Utu continued.
He added that the directors are well versed in the affairs of the bank. “For example, two directors explained a bank piece of legislation expertly at the Fono. The bill became law and protected the bank from obligating resources it didn’t have.”
The board chairman, Sen. Liufau Sonoma, is a retired meteorologist. “It is a good thing to have someone with a science background on the board,” Utu remarked.
He concluded, “The bank is the socioeconomic development agency for the Territory because it is a ‘development bank’ after all. The key areas that need immediate development are education and health care.” |
