Pending loan applications swamp CDA

The Commonwealth Development Authority is currently swamped with issues that need to be addressed but could not be acted upon due to the suspension of its scheduled Board of Directors meeting yesterday for lack of quorum.

CDA Board Chair John S. Tenorio said they had to postpone the regular monthly meeting, scheduled for yesterday, because the board member from Rota could not make it to Saipan.

The government’s prime lending arm has likewise suspended the regular board meeting for its Corporate Development Division Wednesday also due to lack of quorum.

The CDA Board meeting has been tentatively scheduled two weeks from now.

At present, there are only five members sitting on the development authority Board of Directors since two newly appointed members are yet to be confirmed by the Senate Executive Appointments and Governmental Investigation Committee.

Mr. Tenorio said some of the issues that were supposed to be discussed and acted upon during the re-scheduled Board of Directors meeting include new loan package applications.

He said CDA is now swamped with loan applications from local businessmen who are in need of additional funds to refinance existing investments that have been severely hit by the ongoing recession.

Also, development authority officials were scheduled to lay the ground work on measures that would help minimize the increasing volume of delinquent loans, which has reportedly reached 15 percent, amid economic difficulties.

Mr. Tenorio previously bared CDA plans to institute a program that would help curb the increasing volume of delinquent borrowers in light of increasing concerns on the increasing number of problem loans.

Recently, CDA launched a program aimed at educating its clients on ways to become better borrowers, underscoring the importance of a good credit history in their future loan applications.

At the same time, CDA initiated the counseling to halt the rising number of delinquent borrowers which soared to 15 percent during the January-May period, from 13 percent by end-December 1999.

Records obtained from CDA noted that the financial institution’s monthly collections fell by more than 40 percent from the average $700,000 to only $400,000 during the first three months of the year.

However, a big chunk of remiss loan payment collectibles are actually caused by the recently-implemented payment scheme which gives borrowers longer grace period to settle their outstanding credit.

The government-owned financial institution will implement the reduced payment system in at least two years or when economic experts predict a major turnaround of the local economy. (Aldwin R. Fajardo)