CDA reviews fund availability

The Commonwealth Development Authority is increasing vigilance against problem loans through a regular review of its fund availability in order to determine whether some programs need re-construction.

CDA Executive Director Marylou S. Ada said the review of the agency’s available funds has been institutionalized to become a regular part of the Board of Directors’ monthly meeting.

“It’s a standard procedure wherein the comptroller tells us how much money to we have that are up for loans, the available money for the Microloan Program and how much payment have we received, whether it is in tune with our projected receivable,” Ms. Ada said.

She added CDA has been carefully looking at trends in the local market to promptly come up with measures that will mitigate losses by the agency’s borrowers, thereby, offshooting the ever-rising delinquency rate that has surpassed 15 percent.

“The review gives us an indication where are we going wrong, or if we are collecting enough, whether our delinquency rate is continuously going up,” she told an interview.

According to Ms. Ada, the process has also been installed to guide the government-controlled lending agency whether it should continue giving out loans to a particular area of investments where the success rate is not at its best.

“We want to know whether or not we should stop giving out loans because we are not receiving enough from our borrowers. It shows us exactly the financial condition of the CDA as to where we should focus our services,” she pointed out.

Ms. Ada also mentioned that the process is also a part of an increased partnership with the Small Business Development Center wherein CDA refers distressed clients to the Northern Marianas College-run office for business consultation.

Also, business experts at the development authority have been mobilized to conduct counseling sessions with the agency’s clients who may be in search for ways to survive the economic contraction, thereby, continue paying their loans from the CDA.

The move has been taken to also reduce the increasing number of unpaid and overdue loans which have already caused concern among CDA officials. Current delinquency rate was reported at 15 percent, up from last year’s 13 percent.

CDA plans to require borrowers to undergo loan counseling if only to make sure they will not remiss on their monthly payment obligations once their credit applications are approved.

Completion of a series of loan counseling sessions is one of the new requirements being looked at by the government’s lending arm in its efforts to address problems on swelling delinquency rate.