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The Governor of Fiji’s Reserve Bank (RBF) Sada Reddy says he in talks with the Fiji Development Bank (FDB) to revert the FDB to its initial development-based role in the economy.
Reddy told FijiLive he sees the FDB playing a leading role in providing micro-finance to Fiji’s rural economy as a way of accelerating economic growth beyond the estimated average level of 2 percent annual GDP the RBF is forecasting for the next several years.
“I am now seeking cooperation from the Fiji Development Bank to change the terms of their operations. Maybe set up micro-finance alongside other small businesses. We are having discussions with the chairman of FDB in this regard. We will see some concrete results shortly,” he said.
Microfinance could help mainly double the output of Fiji’s agriculture sector and cut down our reliance on imports, thus whittling down Fiji’s huge, $2 billion balance of payments situation which Reddy says is the country’s biggest immediate impediment to growth.
“Access to small loans is linked to this overall growth process whereby we want our people in the rural areas, even those in the urban sectors who are unbankable for instance, we want a mechanism for them to have access to small loans whereby they can utilise that to set up small businesses, cottage industries. That would be their source of living,” Reddy said.
While the RBF has already directed commercial banks to assist in the drive towards microfinance by in the least working with non-government organisations, the central bank governor sees the FDB playing a leading role in this drive.
Fiji’s agricultural production can be doubled because our land is heavily under utilised, he said.
“I think people rely too much on hand outs now. Too many hand outs spoil people. I would urge people to grow their own vegetables and have cows for milk, raise chicken, goats, sheep. We should not be too reliant on imported items. And we need to be careful what we spend our money on when we’re going through these difficult times. When the economy picks up, employment starts to grow, then we are able to increase wages and salaries, then it’s fine. Our government finances do not allow us to give the kind of safety net some of the developed countries have in terms of dole payments and all that. We not have that, so we need to fend for ourselves.”
