SAMOA CHURCH DEBATES SETTING UP ITS OWN BANK

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‘Why not invest in our members?’

By Taina Kami Enoka APIA, Samoa (Samoa Observer, May 28, 2011) – The debate on whether to establish another bank in Samoa continues next year at the Congregational Church of Samoa’s conference.

All these projects and plans need to operate under a ‘development arm’ of the church.

Doing so would mean that like other church-owned businesses, they would operate under a different corporate plan. They would be fully accountable to the church but people would be hired on skills and qualifications.

This he compared to Government sectors that went through corporatization and then privatization.

In reference to the bank debate, till the next conference approaches, there are issues for its members to think about. Based on a feasibility study done last year, there are huge risks involved, said Rev Dr Salevao .

‘Moral assets’ are a prominent concern. If a member of a church takes out a loan, secured with freehold property and defaults on repayments, legally the church has a right to move in.

"But will the church be in a position to enforce the rights against his or her land?" And if the clientele is not limited to church members, then people outside the church should be properly treated as well."

But everything depends on whether the license is granted or not. Officials have said that the banking market is already flooded.

Another bank would just take customers away from the current ones.

Another issue is whether another bank is in the best economic interest sof the country.

"It needs to be properly addressed," he said. Whether it would end up as a commercial bank is another question. It all depends on the church as it might come in the form of something less.

Asked how the church came up with the idea of a bank, it was the interest rates offered by the commercial banks.

Dr Iutesone said that financially, the church relies on donations made by its members throughout the year. Term deposits are made by the church and the banks make a profit on the reinvestment of these funds.

"It’s a balancing exercise. We’re not against the banks. We’re trying to maximize our own interests. If we have money, why not invest in its members?"

The money required to set up a bank would require 10 million tala [US$4.3 million] up front.

"We’ve got a lot of assets to make the bank dream come true he said. Whether we are going to do it remains to be seen. It’s something that needs to be sussed out more fully or we’ll plunge into …chaos."

Immediate plans however include a full renovation of properties leased by the church. They include the John Williams Building in Tamaligi. Built in 1982, Secretary General Rev Dr Iutisone Salevao says they owe it to their tenants to provide a building of professional standards.

The church also owns the Electric Power Commission building next door, the two storey building that houses the Ia Malamalama Bookshop and the hall in Mulinu’u. Work will also be done on the Tuasivi College which is one of six schools owned by the church.

Selling cattle is another project in the plans. There are also quarries located in Malua and Saleimoa which still need to be looked into.

"The whole purpose is to get money to assist church members," he said.

For Rev Dr Salevao, it’s about helping the church members and decision-makers have a duty to their members to see that everything is properly carried out.

"It’s not a game here. We’re talking about the people’s money here and trust money. It’s not my dad’s money. We need to ensure that the people are fully informed."

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