Chair of Finance Committee Calls for Tighter Controls on Small Loan Finance Companies
21 June 2019, Parliament, Apia Samoa. Chair of the Parliamentary Committee for Finance and Expenditure Hon. Ali’imalemanu Alofa Tuuau has called for tighter controls on small loan finance companies in Samoa.
Speaking during her parliamentary address yesterday, Aliimalemanu said that many finance companies come into her village in Savaii with promises of easy access to finance, however the extremely high interest rates and strict terms of collection upon failure, is a concern.
“For example in my village, a van comes every Wednesday to collect the repayments and it does not leave until all the payments are collected;
“Women’s committees are seen walking through the village to find or source the payment for a member who has failed to do so;
“The whole process is very stressful because the van will just park there until they receive payment.”
An Accountant by profession, Aliimalemanu addressed the issue of excessive cost of finance, giving the specific example of a loan of $1,000 tala.
“If you loan a thousand tala, you actually receive $800 tala, with $200 being deducted;
“And the total amount to be repaid is $1,500 tala,” explained the MP for Alataua West.
When asked by the Prime Minister if she was referring to a Government entity, Aliimalemanu clarified that she was referring to small loan financiers such as Roland and others, however, she was calling on the Minister of Finance for stricter laws.
“Perhaps the open financial market suits commercial banks, but stricter laws should be applied to small companies with high interest rates,” she said.