Progressive reforms are transforming the lending landscape for small businesses in the Pacific region, says Dr. Eliki Boletawa, Director, Policy Programs & Implementation, Alliance for Financial Inclusion.

Micro, small, and medium-sized enterprises (MSMEs) are the lifeblood of Pacific island communities. From Suva’s bustling markets to the artisanal workshops in Apia, small businesses not only sustain economies, they preserve a rich cultural heritage.

For generations, Pacific entrepreneurs have faced major challenges in accessing finance. A new AFI publication, “Secured Transactions in the Pacific: A Comparative Study,” reveals however how transformative reforms are reshaping the financial landscape for MSMEs in Fiji, Vanuatu, Samoa, and the Solomon Islands.

Traditionally, obtaining a loan in the Pacific has required collateral in the form of immovable property, such as land. This sidelined numerous entrepreneurs who lacked such assets but possessed valuable movable property such as equipment, inventory, or accounts receivable. Today, however, the introduction of secured transactions frameworks is allowing these movable assets to serve as collateral, democratizing access to credit, and fostering economic inclusivity.

Central to these reforms has been the establishment of electronic collateral registries. These digital platforms enable lenders and borrowers to register security interests efficiently, ensuring transparency, and reducing lending-related risks. Fiji’s Personal Property Securities Registry, launched in 2019, saw over 79,500 security interests registered by mid-2022, signalling growing trust and participation from the business community.

While these reforms are a step in the right direction, many business owners are still unaware that these options exist. What good is financial reform if the very people it’s meant to help don’t know how to tap into it? More needs to be done to raise awareness, ensuring that entrepreneurs—especially in rural and remote areas—understand what’s available, how to qualify, and where to go for support.

Secured transactions can serve as a powerful catalyst as Pacific islands journey towards financial inclusivity. By embracing these reforms, and enhancing awareness among MSMEs, we not only empower our entrepreneurs but also invigorate our economies, ensuring that the Pacific’s natural entrepreneurial spirit can thrive.

Access to finance should never be a roadblock to success. With these reforms, we’re not just unlocking loans—we’re unlocking potential, opportunity, and a brighter future for all Pacific islanders.