CNMI DEVELOPMENT LOAN DELINQUENCY 60 PERCENT

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By Liberty Dones

SAIPAN, CNMI (Saipan Tribune, June 27) - The Commonwealth Development Authority recorded a delinquency rate of 60 percent on loans as of this month. This is considered an improvement, compared with previous years in the Commonwealth of the Northern Mariana Islands.

The Development Authority's delinquency rate was at 83 percent in 2004.

Acting executive director Oscar Camacho could not readily say that 60 percent is a better rate, noting that there had been confusion as to the actual delinquency rate of the Authority’s loans.

"Previously it was said to be at 80 percent level. It's been disputed because of the way it was reported," he said.

But Camacho said that under his term, "there's a lot of improvement in collection."

Camacho began as loan manager at the Commonwealth Development Authority in 2004. He was appointed acting executive director in November last year upon the retirement of long-serving Development Authority executive director Maria Lourdes Ada.

The 60 percent delinquency rate translates to US$13.7 million in loans, out of the US$23 million total loan funds.

"What we're hoping is to further reduce this [delinquency rate]," he said.

Camacho said the US$13.7 million delinquent amount is owed by 131 borrowers, representing 60 percent of the 216 total borrowers.

Of the 131 delinquent borrowers, about 80 are now up for court decision, including the Pacific Gardenia Hotel, which is currently under a receivership. CDA said Pacific Gardenia has an outstanding debt of US$2.4 million.

Camacho said a delinquent loan refers to loans that have not been paid for 30 days to years.

"So it varies. We have different categories for default loans. Some are 30 days, 60 days, 90 days to years," he said.

Camacho said "the Development Authority office aggressively goes after delinquent loans. If efforts don't yield results, we refer these borrowers to collection agencies, then later to court."

Camacho said the Authority still entertains "arrangements" with borrowers who have already been referred to collection agencies.

"We have a very good arrangement. Even if we refer the case to a collection agency, the client can still come here to work things out with us," he said.

June 28, 2006

Saipan Tribune: www.saipantribune.com

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