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CDA eyes reducing loans’ interest rates
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Posted on Oct 26 2006
Borrowers have something to look forward to at the Commonwealth Development Authority.
CDA board chair Vincent Calvo said yesterday that the board is considering lowering the loan rates to help clients cope with the current economic crisis.
“We want to help them during bad times. Reduction of rates proposal is under board discussion. We have to take a comprehensive look at it,” said Calvo.
The CDA currently implements a 7 percent interest rate for commercial loans and 4.5 percent for agricultural loans.
As of June this year, CDA cited a total of 216 borrowers and 131 of them are considered delinquent borrowers, reflecting a 60 percent delinquency rate.
The delinquent loans amount to $13.7 million.
About 80 percent of the delinquent cases have been referred to court litigation.
Delinquent loans refer to debts that are not paid for 30 days to years.
Calvo said CDA has been working closely with these borrowers “to bring them back on track.”
“They’re responding to our call. Many of them are willing to settle their accounts but the economic situation we are in right now is what’s stalling it. So we are being considerate,” said the chairman.
He noted that CDA understands that all its borrowers are considered to be high-risk group of clients.
“Remember that we took in overly high risk borrowers. Our requirement is they have to be declined three times by commercial banks before we can entertain their application,” Calvo said.
He said the board will discuss more on the proposed reduction of rate in its meeting next week.
