In light of questions raised about the work of the Samoa National Provident Fund’s (S.N.P.F) activities lately, including its lending decisions, the Chief Executive Officer of the Fund, Faumuina Esther Lameko-Poutoa, has written to clarify facts readers and members of the public may not be aware of. The letter is published verbatim:
RE: SNPF QUERIES AND ISSUES
For the benefit of S.N.P.F. members and the public, we wish to point out some pertinent facts about SNPF that perhaps many may not be aware of.
The S.N.P.F. Board is obligated by law to declare an interest on S.N.P.F members’ contribution accounts every year of not less than 4%. The main aim of the Investment Strategy is to generate income and profits to fund these interests or what is widely known as ‘dividend’ to members annually.
In the last five years or so, S.N.P.F. has consistently declared and credited interest of not less than 7% from its net profit.
The current cost of a 7% dividend is circa 34million annually and the cost increases as contribution increases.
Hence there is pressure on the Board and staff to generate adequate and consistent income and profits from its investment activities to fund the annual interest to members.
One of the main issues paraded in your paper relates to our loan dealings and portfolio.
For your information, a total of 65% of our investment portfolio is in local loans equivalent to 400 million. 37% or 230 million is lent to members as member loans and short term loans. The remaining 28% or 170million is lent to members and employers as education, professional studies, vehicle, land, housing, church and business loans.
The allocation to member loans is the biggest in our portfolio hence the reason why our office is always full with members. We invest locally.
As long as you are an S.N.P.F. member with contributions regardless of your race, colour or ethnic group, members are entitled to a loan subject to the lending criteria of the Fund.
For registered employers, they are entitled to apply for business loans as long as all employee contributions are paid on time. We also contribute to church loans as they are employers while S.N.P.F. members are active members of these churches.
These loans are all subject to the lending criteria of the Fund.
S.N.P.F. has one of the lowest ‘non performing loan portfolio’ in the financial sector due to stringent measures to protect members’ funds lent to individuals and businesses.
S.N.P.F. is one of the major financier and contributor to economic activity in the country. During past natural disasters, S.N.P.F. has stood by its members and customers to rebuild by declaring cash dividends and loans to rebuild homes.
There has never been a situation where an S.N.P.F. member has not earned interest on contributions or cannot withdraw contributions because there is no cash available. Likewise, a business or individual has never been turned away for a loan because of a lack of funds with S.N.P.F.; the only reason why a loan is declined is because the loan is a high risk one or there is insufficient security and is likely to result in a loss to our members.
S.N.P.F. does not give preference to a particular race, or turns away clients because of their ethnicity.
There are objective guidelines in place to assess all investment decisions to protect members’ money and generate income for members, and those are the only relevant factors.
Race is not a relevant factor. Your continual emphasis of a client’s race or ethnicity implies that certain people should be excluded, never mind that these are Samoan residents and Samoan based businesses. Such exclusion is discriminatory and illegal. S.N.P.F. does not discriminate, and we abide by the law.
S.N.P.F. is subject to all the monitoring mechanisms of government including monthly, quarterly reports to the regulating and monitoring agencies, Cabinet, external audit, many reviews by external agencies plus annual reporting to Parliament.
These are all government measures to ensure that S.N.P.F. like all other entities under the administration of government comply with laws, policies, best practices and will continue to improve. S.N.P.F. has a strong financial position and performance to date with its net asset position and profitability growing consistently.
Finally, the persistent attempt by your paper to paint a negative picture of S.N.P.F. in close to a month now is unfortunate and it undermines the genuine efforts of S.N.P.F’s hard working board and staff to build and improve the Fund’s financial position and performance.
One of the major obstacles hindering personal, financial and wider economic development in our country is a negative attitude.
Lastly, may God bless your newspaper and writers.
A blessed Sunday Samoa,
Faumuina Esther Lameko-Poutoa