Fiji, like most Pacific Island countries, is too small to build a large competitive microfinance industry, according to the Fiji Financial Services Sector Assessment, released by the Pacific Financial Inclusion Programme.
While there are some legal and regulatory hurdles to microfinance and the need to build or improve the supporting infrastructure, the main inhibitor is the lack of appropriate products and retail institutions to deliver them, the report noted.
However, it does have an adequate market to sustain one or two large, strong, full-service, regulated microfinance institutions, it noted.
It stated that the traditional non-governmental organization (NGO) microfinance groups are weak.
An important step is an evaluation of the National Center for Small and Micrometer Development (ENCASED) and its partners to understand their true performance and the reasons for their failure to drive growth.
Given the market size, a 'greenfield' microfinance bank might be possible in Fiji; this is, however, likely to be costly, the report said.
Weaknesses noted in Fiji microfinance institutions include:
Lack of regulatory and supervisory support for most microfinance, particularly cooperatives
Little interest from the formal financial sector towards peri-urban and rural banking
Lack of appropriate products and services
Weak microfinance support institutions, and
Lack of accurate data and knowledge-sharing among organizations.
The report is based on field research conducted last year by the Basix Group, a premier provider of microfinance services and promoter of sustainable livelihoods in India.
EI - B&FI News 06-07-10
Fiji, like most Pacific Island countries, is too small to build a large competitive microfinance industry, according to the Fiji Financial Services Sector Assessment, released by the Pacific Financial Inclusion Programme.While there are some legal and regulatory hurdles to microfinance and the need to build or improve the supporting infrastructure, the main inhibitor is the lack of appropriate products and retail institutions to deliver them, the report noted.However, it does have an adequate market to sustain one or two large, strong, full-service, regulated microfinance institutions, it noted.It stated that the traditional non-governmental organization (NGO) microfinance groups are weak.An important step is an evaluation of the National Center for Small and Micrometer Development (ENCASED) and its partners to understand their true performance and the reasons for their failure to drive growth.Given the market size, a 'greenfield' microfinance bank might be possible in Fiji; this is, however, likely to be costly, the report said.Weaknesses noted in Fiji microfinance institutions include:
