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Saturday, July 08, 2006

Interest rates bad for small business

Taken from an article in the Fiji Times.

The continuous increase in interest rates will bankrupt a number of businesses, warns the Fiji Retailers Association. It has reiterated calls for the Government to appoint a banking ombudsman or a committee under the Ministry of Finance to scrutinise bank fees and charges.

Commercial banks increased interest rates by 1% on all lending products this week after another increase in official interest rates by the Reserve Bank of Fiji.

Association president said the rising interest rates were hurting small-to-medium entrepreneurs. The Association president said, "The small traders are always vulnerable to any such factors which, coupled with increased competition and tough times, will find it difficult to tide through the immediate future. We find that at such times, the larger business houses survive owing to their negotiating powers with the commercial banks and sufficient margins."

He said recent fuel hikes was not helping small traders as the buying power of the average consumer would be affected.

Commercial banks said the rise in lending rates was unavoidable following the increase by the Reserve Bank of Fiji.

The Australia and New Zealand Banking Group Limited will increase interest rates by 1% on all lending products effective from Monday, 10 July. Yesterday, Bank of Baroda implemented its second increase in rates this year.

Note from GV : Small and medium business owners can use our company, Gilbert & Samuels Company Limited, to discuss or come up with business strategies to cater to this new environment. We also can assist with preparing business plans and facilitate business loans. Our contacts are : telephone +679 3396427 or e-mail gilbert@connect.com.fj.

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