24 Aug 2005

Fiji's auditor general criticises FNPF's lending policies

10:14 am on 24 August 2005

Fiji's auditor general has criticised the lending policies of the country's largest financial institution, the Fiji National Provident Fund.

The FNPF, which has assets of over US$1.9 billion, has lent nearly US$1.3 billion to the government or to companies whose loans are guaranteed by the government.

The auditor general says this is not prudent financial practice as the Provident Fund's financing of the state's borrowing could result in its liabilities growing beyond original expectations as in increasing longevity as a result of better medical care.

The Fund was set up in 1967 to provide a pension or a lump sum payment on retirement and was governed by strict guidelines on how it could invest its money.

More recently the government has relaxed the Fund's investment guidelines to enable it to enter into many kinds of financing.