CDA minimizes loans for laundromats, groceries

There is only one thing you should remember if you are looking at launching a business venture and you intend to secure loans from the Commonwealth Development Authority for startup capital: “Submit fresh business ideas.”

Marylou S. Ada, CDA executive director, said the government-controlled lending agency has taken steps to minimize the approval of loan packages intended to finance business ventures that are already crowding the local market.

“We are now looking at other types of businesses that will pave the road not only for additional money circulating in the local economy but services that are currently not available in the CNMI,” Ms. Ada pointed out.

She added CDA has indirectly and unofficially included creativity and innovativeness of the proposed business ventures in the list of criteria that are being looked at before credit applications are approved.

The move has been taken by the development authority to clear the way for new business ideas that are less service-oriented and that are not currently being provided in the Northern Marianas market.

“We want to see diversity now. No more laundromats, video rental establishments, groceries and mom and pop stores. We want people to be more creative in drawing up business plans,” Ms. Ada told reporters in an interview.

CDA would like to encourage the entry of fresh business ventures into the CNMI in order to stir consumer excitement, thereby, unclogging the saturated local market which is currently flooded with service-oriented establishments that cater to small and limited group of consumers.

“There is a need to introduce new things that the local consumers have not seen yet. We want them established here and see how it stimulates the economy amid slowdown in the tourism industry,” she said.

Ms. Ada mentioned aquaculture as among the most lucrative business ventures nowadays which, she said, promises good return of investments since only few individuals have so far invested on it.

She added the demand for fish products out of aquaculture farms has been steadily increasing mainly because CNMI consumers are beginning to get tired of imported and frozen seafood products.

“We have talked with aquaculture operators and they are very encouraged by the trend or the way their products are being accepted in the local market. It has good promise,” Ms. Ada said.

CDA is currently advocating the institution of a crop and fishing insurance service in the Northern Marianas to address concerns raised by local farmers and fishermen who have remained skeptic toward expansion.

Ms. Ada said local farmers and fishermen have been manifesting apprehension in investing bigger capital in crop production and fishing due to the absence of a fallback mechanism in case things do not work right.

She pointed out that this attitude is displayed on CDA records which indicate that Northern Marianas farmers have not been asking for bigger loans.

In Fiscal Year 1999, the government’s prime lending agency loaned out more than $1.897 million for commercial fishing purposes. Farming loans totaled only $273,000 during the same year.

The government is intensifying efforts to minimize the Commonwealth economy’s heavy reliance on only two major business activities, which are both vulnerable to suffer adverse impacts from external forces.