The Katrina catastrophe doesn’t seem to be over as yet since its victims are still struggling to get their lives back on track, what with the U.S. Small Business Administration failing to deliver loan cheques to companies till now.
The administration had given out 950,000 'applications as disaster loans, and had received as many as 26,100 replies out of which it approved only 142 loans. However, reports state that no cheques were cut till Monday, which marked Katrina’s one-month anniversary. The organisation needs to payout the emergency loan amount in 21 days of receiving the application.
Nevertheless, Government supervisors are attributing the delay in granting low-interest loans to households and businesses to a difficult-to-operate computer system, besides holding bad road conditions and incessant floods responsible.
Inspectors claim that their new computer system is delaying simple half-hour chores by hours, as the server connecting them to their offices is often down. Moreover, field workers assert that the strong Gulf Coast sunlight renders the tablet-sized screens almost illegible.
At that, Hector Barreto, the agency head presented his defence for the $23.7 mln computer system, saying that it was a high-tech system that promised added security, whilst being “an improvement over our old system.”
Data, however, proved that after the new system started operating in December, about 41,578 loan applications were received, including Katrina. Out of those, about 14,935 were completely managed and only 24%, i.e. 3,618 were approved. This amount was miserably small, what with it being less than half of the rate recorded in the previous system.
In fact, SBA Sacramento office’s employees had reportedly sent a complaint letter regarding the Disaster Credit Management System to Sen. Dianne Feinstein, D-Calif stating that there were severe delays, “logjams and confusion”, also predicting that the system could fail enormously in the event of a big calamity. This forecast is being considered true for certain SBA inspectors who were sent to Louisiana, Mississippi or Alabama looking at the Katrina tragedy.
What’s more, the dawdling response of state officials in tackling the Katrina crisis seems to be getting to businesses as well, with many already giving up on any federal help and preferring not to ‘waste’ any time in applying for an SBA loan.
Posted
on : Fri, 30 Sep 2005 17:05 GMT | Loans News
By : Pippa Fielding
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