Microfinance Country Information
National Conference on Microfinance
The former Prime Minister, Hon. Major-General Sitiveni Rabuka, in opening the first National Conference on Microfinance reaffirmed that poverty eradication is the nation’s number one priority and that "the Government strategy for the alleviation of poverty is to establish a stable economic environment, to foster economic growth, pursue income distribution through the budget and finally to spearhead microfinance programmes".
From 21 to 23 October 1998, over 150 representatives of civil society organisations, private businesses, financial institutions, government agencies and development partners met in Suva to contribute towards the preparation of an action plan for the development of microfinance services in Fiji. Following stimulating presentations from the Grameen Bank, EPOC, the World Bank, the Asia and Pacific Development Centre, the Foundation for Development Cooperation as well as panelists of experts and practitioners (including UNDP and ILO), participants broke into working groups.
The outcome of these working groups formed the basis of the National Plan of Action which contained specific recommendations in the areas of creating an enabling policy environment, how to expand outreach to the poor and disadvantaged and how to mobilise resources. The conference also reached consensus on the roles and responsibilities of government, microfinance institutions, NGOs, commercial banks, private sector and donors in the development of sustainable microfinance in Fiji. On the specific role of donors, it was endorsed that UNDP take the lead role among the donor community in developing a coordinated strategy for microfinance.
UNDP and ILO provided both financial and technical support for this inaugural conference. Following the conference, Government in its 1999 Annual Budget appropriated a sum of F$3 million for microfinance development. In cooperation with the Ministry of Finance, SMILE organised a Sustainable Microfinance Workshop for NGOs in November. A Microfinance Unit has been set up in the Ministry of Finance and a National Microfinance Task Force, with multi stakeholder representation, is being set up to implement the Action Plan. UNDP has pledged its full support to this national initiative with a programme of technical assistance and MFI capacity building through its Pacific SMILE Programme.
Anandpur Microcredit Project
Losana’s dream is to have her own home one day. Losana Cakausese is one of the many women earning a living with the help of the AMP in Ba, Fiji.
Before joining the project, Losana used to borrow money from money lenders at 10 percent interest per day for her micro-business. With her first loan from AMP she bought materials for screen printing, patchwork and crochet as well as a pig. From the sales of her handcrafts, she was able to pay the full school fees of her child, contribute to buying food and taking care of other needs of her family. She is now on her second loan of F$400 (approx USD210) from which she has expanded her screen-printing to target hotels around Fiji and has increased the number of pigs she is raising. Her success has inspired other women in the community to join AMP.
The AMP is a joint project of the Rotary Club of Ba, the National Planning Office and UNDP which is providing the lending capital and technical assistance. The project is implemented in the squatter settlement of Anandpur and nearby Bandrau comprising of very low income Indo-Fijian and Fijian families. A participatory evaluation of the scheme was carried out in October 1998 where several interesting and valuable lessons emerged. It was found that group guarantee did not function well among the very low income members. The fixed amortisation schedule was also modified to allow members to pay more when their earnings were good to make up for periods of lower sales. It was also found that many members lacked even the most basic business skills; validating further that the minimalist approach do not work well in a society with very weak entrepreneurial culture and very small markets. These lessons are being incorporated in the continuing work of UNDP in developing appropriate approaches for the delivery of sustainable microfinance services to the poor.
Community and Enterprise-Based Savings and Loans Scheme
Torika Seru of the Public Rental Board (PRB) flats in the Raiwaqa area of Suva leads her group as Block Coordinator in the collection of savings. The Raiwaqa Savings and Loans Scheme was launched on November 28th 1998 by UNDP Resident Representative, Romulo Garcia together with the PRB Board of Directors. The scheme is a joint project between the Pacific SMILE Programme, the PRB tenants, PRB and the Bank of Hawaii. The partnership with the Bank of Hawaii provides an innovative model for replication to other schemes. Sixty nine members have since joined the scheme, which encourages members to save for educational, medical, customary and other family needs. The scheme provides an affordable, safe and convenient financial service to the members. It is currently being expanded to other PRB estates in the Suva area.
A similar scheme targeting workers of local garment factories is also being piloted. The scheme brings banking services to the workers right in the factory as many of the workers cannot afford the minimum deposits required by banks, have no time to go to the bank or find it too costly to travel to the nearest bank. Discussion are also underway to explore the viability of a savings and loans scheme for Housing Authority low income home owners.
All these schemes are designed to be financially sustainable with the maximum participation of community groups and management of private enterprises.
SEED (Social and Economic Equity for the Disadvantaged) Foundation is the first local NGO specialising in the provision of microfinance and microenterprise development services for the disadvantaged. Its board is made up of a group of socially committed people from the private sector – representing a strong combination of skills and expertise in private business, financial management and training. They are based in Suva and has a strong commitment to make SEED into a financially viable microfinance institution. UNDP, through the Pacific SMILE Programme, has been closely associated with this NGO since its formation in April 1998. SMILE is involved in the testing and training of its field credit officers and has provided assistance in developing its viability plan and the setting up of its MIS. SEED has received training grants from SMILE to accelerate their outreach and to strengthen the capacity of their field credit officers. SMILE’s Microfinance Specialist, Manny Palis and Livelihoods Development Specialist, Ofelia Eugenio, provides on-demand technical support and advice to SEED management and staff.
SEED Foundation has a total of 50 clients, all of whom are women, with a total loan of F$3,000 and a repayment rate of 100 %. Each client is also saving an average of F$40 per month. SEED Foundation fund-raises for all its on-lending capital and the shortage of on-lending capital is considered their biggest constraint in expanding their current rate of outreach. SMILE is assisting them in mobilising additional resources to expand their lending operations.
Source: UNDP, Fiji
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