Vanuatu’s MSMEs Face Major Challenges in Accessing Finance
Access to finance remains a significant obstacle for Micro, Small, and Medium-sized Enterprises (MSMEs) in Vanuatu, according to a recent survey conducted by the Reserve Bank of Vanuatu. The survey found that only 20% of businesses are owned by women, falling short of the target of 30% set out in the Maya Declaration.
Key Challenges Faced by MSMEs
The survey highlighted several key challenges faced by MSMEs in Vanuatu:
- Lack of infrastructure
- Inefficient government service delivery
- Competition from cheap imported products and services
- Small market size
- Limited support services for business development
Access to Financing
The survey found that a high percentage of businesses accessed informal financing sources for start-ups, despite the unsupervised nature of the sector. Additionally, women’s participation in total business ownership was lower than among men.
Future Policy Directions
The Reserve Bank plans to consult with the public on the findings of the survey to incorporate their views in future policies on MSMEs. The Governor of the Reserve Bank, Simeon Athy, stated: “The lack of past surveys on a national scale and comprehensive database on MSMEs in Vanuatu posed challenges in the initial survey design and conduct. However, we are proud to present this report, which will serve as input for formulating our medium- to long-term policies on SMEs.”
Importance of Technology
The survey also highlighted the importance of technology in business operations among MSMEs. The findings identified the main barriers preventing them from accessing and using financial products and services.
Conclusion
The findings of this survey are expected to enhance evidence-based policy solutions to address gaps in the financial inclusion agenda in Vanuatu. The Reserve Bank would like to thank the Alliance for Financial Inclusion (AFI) for providing grant funding, as well as the survey Technical Committee, staff, and Directors who contributed to the success of the project.
References
- Maya Declaration: [insert link]
- Alliance for Financial Inclusion (AFI): [insert link]