Salutation
- Hon. Minister MCILI / Hon. Minister MOFT
- PS MCILI, PS MOFT
- Directors MCILI & MOFT
- Heads of Financial Institutions
On behalf of the Central Bank of Solomon Islands, I congratulate the Minister, the government and all stakeholders on the re-launch of the Small and Medium Enterprises Credit Guarantee Scheme.
AS we all know, the scheme ceased in January of 2025 because the guaranteed commitment far exceeded the available funding. The issue then was whether CBSI would be willing to take on additional exposure. At the time, this was unclear, so the scheme had to be temporarily suspended for discussion with stakeholders.
Under the NFIS 3 strategy, improving access to finance for MSMEs and building their capacity through financial literacy and business training is one of the key strategic objectives in the country’s financial inclusion strategy.
This inclusion is in recognition of the fact that MSMEs are one of the key segments which drive financial inclusion, through job creation, income-generating activities, and inclusive participation in the SI economy.
Thus, to assist MSMEs have access to finance, the Central and financial inclusion stakeholders, including the MCILI have collaborated on a number of important initiatives. These include the SME Credit Guarantee Scheme (where over 160 MSMEs have accessed or participated in), the SME Export Finance Facility, and MSME Credit line, among others.
Undoubtedly, these initiatives have assisted many MSMEs to grow over the years, but I think more coordinated efforts are needed to disseminate information and promote the scheme. Based on the data we have, uptake appears very low among youth- and women-owned MSMEs. This speaks to the challenges we faced in attracting youth- and women-owned MSMEs to tap schemes and access finance. Moreover, it also highlights the interconnected barriers prevalent in the country that prevent MSMEs from accessing finance and expanding their businesses.
Before I conclude, I would like to share some general observations regarding the challenges faced by MSMEs. Firstly, the difficulties that MSMEs encounter in accessing finance are not primarily due to a lack of initiatives intended to support them. Rather, the issue primarily concerns the design of schemes or products, which are either not sufficiently tailored to meet the unique needs of MSMEs or do not adequately reflect the existing ecosystem intended to support these enterprises. To promote inclusivity, the schemes might necessitate innovative thinking, extending their design beyond traditional product development, and focusing on MSMEs.
Secondly, our MSMEs also need compliance support and management resources not just for the purpose of accessing finance but to help them prepare to compete with MSMEs in the country, in the region, and globally.
My final observation is that MSMEs require support. In addition to accessing finance, this encompasses the provision of structured training programs throughout the borrowing cycle, personalized mentoring and advisory services, as well as access to markets and market infrastructure.
A recent MSME survey on the scheme's administration offers valuable recommendations, which should be considered to enhance the scheme. These include:
- Simplifying the loan application process;
- Implementing risk-based lending strategies;
- Enhancing post-loan business support;
- Adding flexible repayment options; and
- Improving financial literacy and awareness through a joint government and financial institutions approach.
Role of CBSI and Words of Appreciation to the Government
CBSI stands ready to administer the Scheme in accordance with the agreed framework and to work closely with Government, participating financial institutions and other stakeholders. Our shared responsibility is to ensure that this Scheme is practical, accountable, and focused on real outcomes for MSMEs, people and communities.
Honourable Minister and esteemed colleagues, this re-launch signifies a vote of confidence in our citizens. It communicates that Solomon Islanders willing to work, invest, and create opportunities should not be hindered solely by a lack of collateral. With meticulous execution, this scheme has the potential to transform business ideas into employment, income, and the growth of local enterprises.
To this end, I commend the Solomon Islands Government for its recognition of the importance of SMEs' contribution to the Solomon Islands Economy by re-launching the scheme, including its commitment to provide funding support to the SMECGS.
In closing I would like to make three calls for action.
Currently, DBSI is the only financial institution active in the SMECGS space. I urge other financial institutions and service providers to support SMEs through this Credit Guarantee Scheme.
I also encourage all FIs to actively participate by sharing their ideas on how to improve the scheme's design and usage, ensuring it remains sustainable and contributes to economic growth.
Finally, I call on SMEs to be responsible borrowers—practicing responsible borrowing and reducing the risk of high defaults—and to use the SMECGS responsibly so that more SMEs can access it in the future.
With these, I once again congratulate the Minister, the Solomon Islands Government, and all stakeholders on the relaunch of the SME Credit Guarantee Scheme and its future success.
Tagio tumas.
End//