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Samo’a’s Finance Sector: A Path Towards Greater Access and Stability

Apia, Samoa - The Central Bank of Samoa has taken significant strides in implementing laws and regulations to promote a robust financial system, aimed at facilitating financial intermediation, managing risks, and enabling payments.

Overview

The finance sector in Samoa is dominated by regional commercial banks that are well-integrated into the international payments system. Additionally, the country has a mandated retirement savings scheme managed by the Samoa National Provident Fund (SNPF), which ensures those formally employed have access to retirement benefits.

Goals and Objectives

  • Create a deregulated financial system with public sector agencies supporting retirement savings, housing finance, development finance, and workplace and road accident schemes.
  • Align monetary policy with economic fundamentals and competitiveness in international markets.

Financial Inclusion

To promote financial inclusion, the government is placing a strong emphasis on financial literacy:

  • Integrating it into school curricula
  • Strengthening partnerships to facilitate innovations in the finance sector

This initiative aims to provide individuals and micro, small, and medium-sized enterprises (MSMEs) with greater access to finance.

Development Partner Support

The Asian Development Bank (ADB) has been a key partner in supporting Samoa’s finance sector development:

Projects

  • Pacific Private Sector Development Initiative
  • Samoa Agribusiness Support Project
  • Supporting Finance Sector and Private Sector Development in the Pacific program

These initiatives have focused on improving access to finance through secured transactions reform, strengthening commercial banks, and promoting economic use of customary-owned land.

Technical Assistance

The ADB has provided technical assistance to support policy-based operations and customer due diligence platforms for the finance sector.

Problem Analysis Diagram

Despite progress, Samoa’s finance sector still faces several challenges:

  • High sectoral concentration of large borrowers
  • Limited access to formal financial services
  • Unwillingness by commercial institutions to offer financial services

To address these issues, the ADB has identified key areas for intervention:

Areas for Intervention

  • Improving access to financial services for individuals and MSMEs
  • Addressing anti-money laundering and combating the financing of terrorism (AML/CFT) risks
  • Supporting innovative use of new technologies
  • Eliminating barriers to women’s access to financial services

The Samoa government and development partners are committed to working together to overcome these challenges and create a more robust and inclusive finance sector, ultimately promoting economic growth and stability in the country.