The National Reserve Bank of Tonga is optimistic that a loan guarantee scheme successfully operated in Samoa and Fiji will help boost the economy of the island kingdom.'
The Governor of the Bank, Dr Ngongo Kioa said the loan scheme will enable government to save between $5 to $10 million pa’anga annually.
The funds will be used as securities for small medium enterprises loan.
This, Dr Kioa said, is an incentive to encourage small business enterprises to enhance their business opportunities.
The funds will not be given directly to the small business; however it will be managed by a separate financial unit.
The Governor said once the loan scheme is up and running, it will contribute to increasing deposit rates in the banking system which can help boost economic growth