Fiji Microfinance Policy Review

This paper reviews the microfinance sector in Fiji.The paper makes the following points:

• Public, private and community sector institutions in Fiji provide microfinance services;
• The microfinance sector is more a governmental than a voluntary sector initiative;
• Multilateral assistance, particularly that of the United Nations Development Program (UNDP) has been helpful;
• The ‘National Microfinance Unit (NMFU) has failed to disburse to its client institutions most of the funding that the Government has provided for microfinance lending;
• However, the NMFU has initiated a promising initiative in rural, community-based microfinance;
• Commercial banks in Fiji are not active in microfinance;
• The Reserve Bank has proposed various methods to extend rural banking services.

The review outlines architecture for microfinance in Fiji in which the ‘National Center for Small and Microenterprise Development (NCSMED), is the primary source of funding and technical assistance.The review also examines the viability of government programs for microfinance, their conformity with good practice principles, and the capacity-building needs of the sector. It recommends:

• The NCSMED as the domestic focal point for capacity-building;
• World Bank assistance to the NFMU.