In the proposal, MMF wants all members of NPF to be able to choose to borrow from the fund any amount equivalent to one-third of the amount standing credit to the member.
“That is any member should be permissible to loan one-third of his or her balance with the bank,” president Charles Dausabea said.
“NPF board should also accept voluntary contribution from Solomon Islanders pursuant to section 18 of the SINPF Act.
“MMF believes, Solomon Islanders should be advised that the better place to deposit money is with the SINPF where they can be able to obtain fully drawn loans that are secured with their pledges.
“MMF also proposed that where members refuse or wilfully neglects to repay their loan account and when the loan amount plus interest has reached two-third of their pledge balance, the Fund shall realise and close the member’s loan account,” Mr Dausabea said.
He said they further proposed that a 5 per cent interest be charged per annum on loans, a rate seen as fair and reasonable to the board as trustee of members Fund and the borrower who is a member.
“If a member is repaying a home loan with one of the foreign owned commercial banks at 15 per cent per annum interest, he or she can borrow from the fund to pay off his or her loan and pay the Fund at 5% p.a interest.”
The proposal came following NPF board’s decision to lend $15 million to Tavanipupu Island Resort Limited, a non-member, and the $600 million of members fund lying in the commercial bank as term deposits which MMF said should have been utilised by members in the form of loan.
“The $600 million should be given to members in the form of loans rather than benefiting only non-members and earning the banks around $90 million in their 15% interest whilst only generating $900,000 from its 0.15% interest annually.”
MMF argued that the $600m is members’ money and they should not be deprived of it except where such deprivation is permissible by law.
It also states that the SINPF Act (cap. 109) is the law or instrument that creates the trust whereby the trustees are appointed to become the SINPF Board.
“Therefore the Board as trustee to Fund members’ money must always ensure that whatever actions and decisions taken are done in the best interest of the Fund members who are beneficiaries.
“Thus the framework within which the trustee (SINPF Board) operates in terms of money belonging to the Fund is clearly specified in the SINPF Act in particulars s. 7(2).
“Where it sates clearly decisions on depositing, investing, making loans with members money must fall in accordance to the SINPF Act and also the Public Finance and Audit Act.
“Furthermore members have the due right to question, call for answers and propose better causes of actions that will protect and benefit the interest of Fund members as pinpointed under SINFP Act s.35.
“The foremost argument is the emphasis that the Constitution and SINPF Act clearly spells that the Board as trustee of Fund members must facilitate the lending of money to members so that where members choose to borrow money, they should be able to do so from the Fund.”
Comments are being sought from the NPF board.
By Daniel Namosuia
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