The International Finance Corporation (IFC) has joined forces with BRED Bank Vanuatu and BRED Bank Solomon to enhance access to financing for Small and Medium-sized Enterprises (SMEs) in both nations, with the aim of promoting economic growth and job creation.
According to Allen Forlemu, IFC’s Acting Regional Vice President for Asia and the Pacific, many SMEs in Vanuatu and the Solomon Islands face significant hurdles in securing the capital necessary for their growth and innovation, which limits their contributions to the economies. The IFC is looking to bridge this financing gap through strategic investments that will not only increase lending to SMEs but also promote commercial segment borrowers across the region.
The initiative involves the establishment of an unfunded risk-sharing facility of up to $10 million to be allocated to BRED Bank in Vanuatu and Solomon Islands as part of the Small Loan Guarantee Programme, which is supported by the International Development Association’s Private Sector Window. This funding will enable BRED to increase the volume of business loans available to SMEs, while IFC will also provide advisory services to assist these enterprises in their growth strategies.
Owen Thomson, CEO of BRED Solomon Islands, highlighted the bank’s key role as the leading financial institution in Vanuatu and its expanding influence in the Solomon Islands. He emphasized that this partnership with IFC, built on a history of successful collaboration, will empower BRED to enhance its financing options for businesses, directly benefiting the small enterprises that are vital to economic prosperity in these regions.
This collaboration is a promising step towards strengthening the financial framework for SMEs in Vanuatu and the Solomon Islands, highlighting the importance of investment in small businesses as a key driver of resilience and economic advancement. Through addressing the capital access challenges faced by SMEs, this partnership aims to foster a more robust economic environment that supports innovation and job creation.