OPTIONS for financing Micro, Small and Medium-sized enterprises (MSMEs) in Fiji have just expanded with the passing of the Access to Business Funding Act in Parliament last week.
The new Act was developed by the Ministry of Trade, Co-operatives, Micro, Small and Medium Enterprises and Communications and the Reserve Bank of Fiji (RBF), with support from the Asian Development Bank’s Pacific Private Sector Development Initiative (PSDI).
“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.”
Described as “groundbreaking”, the passing of the 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,” DPM and Minister for Trade Manoa Kamikamica said.
“This will make Fiji a more attractive destination for investment and business, fostering the development and growth of MSMEs in Fiji.”
RBF Governor Ariff Ali said the three new and innovative financing platforms prescribed in the Act 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,” Mr Ali said.
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.
The new Act 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.