Commercial banks in Fiji have zero lending towards the agriculture sector, said Minister for Agriculture Dr Mahendra Reddy in Nadi this week at the opening of the Food System Validation Workshop.
He said the loans were related to land tenure and posed a “binding constraint” towards the agriculture sector.
“You look at commercial banks, they basically don’t want to lend,” said Dr Reddy.
“Commercial banks’ lending portfolio to agriculture is basically zero and that is the primary reason why the Government has developed the Fiji Development Bank.
“Interestingly, most of the agriculture loans were through the Fiji Development Bank and the commercial banks shied away.
“If you look at the portfolio of the commercial banks, they are not interested in lending for agriculture because that particular production would the basis of the morgage.”
He said banks “have a case” for not giving loans for agriculture.
“They would not be able to realise their returns if they take over the morgage property so a short-term lease won’t liquidate to recover.”
