[Fiji] Social service warns of poverty

from The Fiji Times

THE Fiji Council of Social Services has called for thorough screening of companies that increase interest rates for hire purchase items.

FCOSS executive director Hassan Khan said any such move to raise hire purchase interest rates would create poverty within families who buy on hire purchase.

"Many people will not be able to meet their payments and it will perpetuate poverty in families," Mr Khan said.

"What are the departments concerned doing about this increase in interest rates? What are the Fair Trading department and the Prices and Incomes Board doing? Aren't they supposed to be regulating prices? And what is the Consumer Council doing?"

Mr Khan said many families were struggling to make ends meet with what little funds they had.

He said the Consumer Council should follow up on advertisements by furniture and white good companies to ensure that customers were aware of the total cost of items they purchase, including the full interest cost.

The Fair Trading Department and the PIB said they did not deal with interest rates. The Consumer Council could not be reached for a comment.

Economist Doctor Biman Prasad has warned that lending, hire purchase and other credit organisations might take a cue from the Reserve Bank of Fiji and commercial banks by increasing their interest rates.

"Those who continue to borrow or have repayments to make it will have to fork out more from their pay for the payments," he said.

The RBF announced in February an increase in the official interest rate by 1 per cent. The bank raised the interest rate by 1 per cent to 3.25 per cent just four months after its last increase.

RBF said the measure was aimed at cutting high spending patterns and reducing the large import bill.

RBF warned that current consumer spending patterns were unsustainable.