Finance in Fiji: Backing Businesses and Creating Jobs

As of May this year, the Fiji Development Bank (FDB), can count on AFD Group and the European Union to guarantee its loans granted to small and medium-sized enterprises (SMEs). Support is being given to SMEs that have a significant impact on the development of the archipelago, whether they are green or social businesses; are run by women or young people under 25; or work in the fields of health, education, agriculture or digital technology.

This support is part of the Group's Euriz program, which facilitates access to credit for high-impact SMEs in Africa, the Caribbean and the Pacific. These companies play a key role in economic development and the ecological transition – in Fiji, they employ 60% of the assets and contribute 20% of the GDP. However, they encounter difficulties in obtaining financing, because they are often perceived by the banks as a risky clientele.

Guarantee of 3 million euros

The Euriz guarantee allows SMEs in the regions concerned to turn to partner financial institutions (such as public and private banks or specialized financial institutions), for loans in local currencies, and these financial institutions can in turn call on AFD or Proparco to guarantee part of the loan risk.

To this end, the FDB will benefit from a guarantee covering up to 70% of loans, up to a limit of 3 million euros, which will make it possible to cover nearly €5 million in financing. As the average amount of the loans concerned is estimated at about €100,000, this guarantee should make it possible to back the investment of around 50 SMEs, and to create or maintain between 500 and 1,000 jobs.

Further reading: Discover AFD's Pacific Ocean Regional Office

Technical assistance estimated at €500,000 will also be delivered to the FDB to remove barriers to financing SMEs specializing in climate change mitigation. This can cover everything from technical capacity building, to sector analyses and risk management. 

A first in the Pacific region

Adapting to the needs of the financial institution, the operation is also far from being anecdotal for the AFD group since it is the first variation of the Euriz program carried out in the Pacific zone and the first bilateral operation of the Group in Fiji.

"The FDB and AFD Group have an important role to play in the fight against climate change,” says Philippe Orliange, AFD's Executive Director for Countries. “Which means channeling public and private financing towards green investments to support mitigation and adaptation, from communities to regional level.”