Username Enter your email address
Password Enter your password

Import Substitution and Export Finance Facility

Reserve Bank of Fiji Import Substitution and Export Finance Facility

Reserve Bank of Fiji Import Substitution and Export Finance Facility
On 30 July 2010, the Reserve Bank of Fiji (RBF) rationalised its Export Finance Facility and Import Substitution Facility into a single entity called Import Substitution and Export Finance Facility (ISEFF). The Facility will continue to focus on improving Fiji’s balance of payments position by assisting exporters, large scale commercial agricultural farming and renewable energy businesses[1] to obtain credit at concessional rates of interest. In addition, the RBF has further reduced the administrative requirements and streamlined the approval process for funding under the scheme.
The Export Finance arm of ISEFF aims to advance the competitiveness and ensure the availability of credit to the export sector. Likewise, the Import Substitution arm will promote both domestic commercial agricultural production and the competitiveness of local agricultural produce.
Export Finance under ISEFF is available to both primary and secondary exporters. The Facility also includes financing for exports of certain professional services such as architectural, engineering and maritime services.
Import Substitution funding under ISEFF is available to new and existing local agricultural businesses involved in import substitution. Businesses may apply for concessional funding for the production of fruits, vegetables, honey, root crops, dairy produce, beef, poultry, pig farming, aquaculture and renewable energy[2]. However, businesses that produce items in which Fiji is already self-sufficient, such as canned meat will not be able to access funds under the Facility unless the produce is to be exported. Clarification on the above eligibility requirements can be sought from the Reserve Bank.
The Facility is provided through the commercial banks, Fiji Development Bank (FDB) and licensed credit institutions (LCI)[3] with no recourse to RBF which provides back-to-back finance with a limit of $40 million as its total exposure. The amount of advance under the Facility is now at the discretion of the lending institutions based on respective credit assessments. Loans will be limited to a maximum of $1.0 million per business and will be allocated on a first-in basis. RBF reserves the right to award loan amounts greater than $1.0 million in special circumstances.
Currently, the interest rate charged on ISEFF advances is set at 2 percent per annum. The commercial banks, LCI and FDB can borrow from RBF at this rate and on-lend to businesses with a maximum margin of 6 percent.

[1]In November 2010, the RBF extended the list of eligible import substitution businesses to include renewable energy.
[2] In November 2011, the RBF extended the ISEFF eligibility list to include import substitution related businesses engaged in poultry, honey and pig farming.
[3] LCI includes Credit Corporation Fiji Limited, Merchant Finance & Investment Company and Home Finance Company