BY JOHN HOUANIHAU
The Solomon Islands Government (SIG) yesterday signed a revised Memorandum of Understanding (MoU) with the Central Bank of Solomon Islands (CBSI) to strengthen the administration of the Small and Medium Enterprise (SME) Credit Guarantee Scheme and improve access to finance for local businesses.
The revised agreement was signed between the Ministry of Commerce, Industry, Labour and Immigration (MCILI), the Ministry of Finance and Treasury (MOFT), and CBSI.
Speaking during the signing ceremony, MCILI Permanent Secretary, Riley Henao Mesepitu said the revised MoU updates and strengthens the previous agreement to improve the administration and implementation of the Government-backed loan guarantee scheme.
He said the scheme is funded by the Solomon Islands Government through MCILI under the national SME policy and is designed to support Solomon Islanders engaged in small and medium-sized businesses.
“We know that accessing finance is one of the biggest challenges for businesses, which is why this scheme was established to assist Solomon Islanders who want to run businesses,” Raylie said.
He said the initiative supports entrepreneurs operating within the country as well as businesses involved in export activities.
Raylie explained that under the revised arrangement, the Ministry of Commerce will continue to administer the policy, while the Ministry of Finance manages the scheme’s funds. CBSI will oversee the administration of the guarantee scheme through participating commercial banks and financial institutions.
He said the revised MoU clearly outlines the collaborative responsibilities of the three institutions, with objectives that include improving access to finance, sharing credit risks to encourage private sector lending, managing risks prudently, and maintaining accountability and transparency.
Raylie thanked CBSI Governor Luke Forau and his team for administering the scheme and said technical officers are preparing a detailed report on its performance and impact since its establishment.
Governor Luke Forau said CBSI’s role is to administer and facilitate the scheme as part of the Government’s policy to support SMEs.
He said the guarantee scheme is specifically designed for businesses with viable loan proposals but insufficient collateral to secure financing from commercial banks.
“The participating banks will assess whether a business proposal is viable, and if the applicant lacks sufficient security, they can recommend the proposal under this guarantee scheme,” Forau said.
He added that CBSI is committed to processing applications quickly, aiming for a turnaround time of one to two days to ensure businesses can access finance without unnecessary delays.
Forau described the SME Credit Guarantee Scheme as an important Government initiative that will help more Solomon Islanders secure affordable business loans and expand their enterprises.
Photo credit: John Houanihau
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