Chamber: Tonga PM Misinformed On Business Failure

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Says cost of credit relative to Pacific is reasonable

WELLINGTON, New Zealand (Radio New Zealand International, August 31, 2015) – The Tonga Chamber of Commerce says the Prime Minister Akilisi Pohiva has mistakenly blamed banks for failed businesses.

This week the Prime Minister told Parliament high interest rates are discouraging people from borrowing which is contributing to the closure of businesses.

But the president of the Tonga Chamber of Commerce, John Paul Chapman, says the Prime Minister has been misinformed.

"The cost of credit in Tonga, relative to other Pacific Islands economies, is actually quite reasonable, quite low. That's where the Prime Minister should be benchmarking against, plus I think I read a stat there the other day that said 80 percent of businesses actually closed down because of poor management and I think that's been the case in Tonga, rather than the cost of interest from the banks."

John Paul Chapman says the focus needs to be on addressing legislation around bankruptcy, insolvency, and land tenure to help businesses survive.

 

 

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