SUVA, FIJI —This week, Fiji approved a groundbreaking
Access to Business Funding Act, which will enable innovative
financing options to increase capital access for the
country’s Micro, Small and Medium-sized enterprises
(MSMEs). The new Act was developed by the Ministry of Trade,
Co-operatives, Micro, Small and Medium Enterprises, and
Communications (the Ministry) and the Reserve Bank of Fiji
(RBF), with support from the Asian Development Bank’s
Pacific Private Sector Development Initiative
(PSDI).
The new Act makes Fiji the first country in
the Pacific to introduce a comprehensive regulatory
framework that can unlock new, innovative financing options
for MSMEs, including crowdfunding, peer-to-peer lending, and
small offers regimes, while establishing clear guidelines
for ensuring investor protection.
“The
Access to Business Funding Act being passed in Parliament is
a welcome step towards providing alternative financing
options. This will make Fiji a more attractive destination
for investment and business, fostering the development and
growth of MSMEs in Fiji,” said Deputy Prime Minister and
Minister for Trade, Co-operatives, Micro, Small and Medium
Enterprises and Communications, Hon. Manoa
Kamikamica.
Governor of the Reserve Bank
of Fiji, Ariff Ali, highlighted, “This law will unlock
alternative financing options for MSMEs under the three
regimes of small offers, crowdfunding and peer-to-peer
lending. These new and innovative financing platforms are
expected to enable affordable and easier access to funding
for MSMEs, which will further stimulate growth for the
sector and improve contribution to Gross Domestic Product
(GDP). At around 18 percent, Fiji’s MSME contribution to
GDP is comparatively lower than the 40 percent for emerging
markets economies, a gap we hope this reform can help
close.”
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The passing of the Act follows extensive
stakeholder consultations, led by the Ministry and the RBF.
Representatives from the private sector, including MSMEs,
the superannuation fund, banks, credit unions, development
partners and civil society organisations, contributed
valuable feedback to ensure the legislation reflects the
needs of businesses and investors alike.
It also
aligns with the Fiji Government’s National Development
Plan 2025-2029 and Vision 2050 as well as the RBF’s
National Financial Inclusion Strategy target of improving
access to finance for MSMEs to achieve broad-based,
inclusive and sustainable growth.
“PSDI
is proud to have supported the development of this new
legislation,” said PSDI Senior Finance Sector Specialist
Jeremy Cleaver. “We are now looking forward to working
with the Ministry and the RBF to use the provisions of the
legislation to deliver platforms that offer new,
well-regulated financing options for Fijian
businesses.”
PSDI is an Asian
Development Bank (ADB) technical assistance program
undertaken in partnership with the governments of Australia
and New Zealand. It supports ADB’s 14 Pacific developing
member countries to improve the enabling environment for
business and achieve inclusive, private sector-led economic
growth, including through reforms designed to increase the
availability of finance for Pacific
businesses.
