The additional funding will strengthen the Scheme’s capacity to support SME lending across the country.
The Scheme, which was established in 2016, has enabled 169 SMEs to access credit through participating financial institutions.
Since its inception, the Government has invested more than SBD15.8 million in the Scheme, leveraging SBD42.5 million in loans for businesses operating in agriculture, transport, retail and wholesale, tourism, forestry, fisheries, ICT and telecommunications, and construction.
Permanent Secretary of the Ministry of Commerce, Industry, Labour and Immigration, Riley Mesepitu, said the revised MOU strengthens the previous agreement through improvements to key provisions that will enhance the administration and implementation of the SME Business Loan Guarantee Scheme.
“The assistance is intended to support Solomon Islanders, especially small and medium enterprises and entrepreneurs who are engaged in business activities.
“We know that accessing finance is one of the biggest challenges for businesses. That is why this Scheme was established—to assist Solomon Islanders who are starting and growing businesses. Some businesses operate locally, while others are involved in exporting products overseas,” Mesepitu said.
He said the Ministry of Commerce administers the SME policy, the Ministry of Finance provides the funding, and CBSI manages the Scheme in collaboration with participating commercial banks and financial institutions.
CBSI Governor Dr Luke Forau said the Credit Guarantee Scheme is a Government policy initiative aimed at supporting viable businesses that struggle to obtain loans because they lack sufficient collateral.
“This Scheme mainly supports SMEs that have viable business proposals but do not have sufficient collateral or security to secure a loan.
“Participating banks assess each business proposal. If they determine that the proposal is commercially viable but lacks adequate security, they can recommend that the applicant be supported through this Scheme,” Dr Forau said.
Dr Forau acknowledged the Government for maintaining its commitment to helping SMEs gain greater access to finance.
The Credit Guarantee Scheme was established to address one of the biggest barriers facing micro, small and medium enterprises (MSMEs)—limited access to finance due to insufficient collateral.
Under the Scheme, the Government guarantees up to 90 per cent of the unsecured portion of a loan arising from a collateral shortfall, reducing the lending risk for participating financial institutions and enabling more businesses to access finance.
Businesses continue to apply for loans through the normal lending processes of participating financial institutions.
Where an applicant meets a lender’s credit requirements but lacks sufficient collateral, the financial institution may nominate the loan to CBSI for consideration under the Scheme. CBSI then undertakes its own due diligence before approving the guarantee.
The Scheme is administered by CBSI in partnership with the Development Bank of Solomon Islands (DBSI), Credit Corporation Solomon Islands, Bank South Pacific (BSP), ANZ Solomon Islands and Pan Oceanic Bank (POB).
It supports businesses across most productive sectors of the economy, while excluding gambling, alcohol and tobacco-related activities, unsustainable logging operations, and projects that do not have the necessary government approvals.
During the signing ceremony, the parties recognized that access to finance remains a major constraint for many SMEs, particularly start-ups, indigenous-owned businesses and enterprises seeking to expand their operations.
By sharing credit risk between the Government, CBSI and participating lenders, the Scheme encourages greater lending to productive businesses that may otherwise struggle to obtain financing.
[end]
