National Reserve Bank of Tonga: Efforts to promote financial inclusion has been globally recognized
If you are serious about the expansion of financial services to all sections of society, then it is about time to take on the Maya Declaration journey as the benefits of financial inclusion are not only significant for individuals, but for the nation as a whole to achieve inclusive development and growth
- Dr. Sione Ngongo Kioa, Governor, National Reserve Bank of Tonga
The National Reserve Bank of Tonga (NRBT) winning the Maya Declaration Award in September 2016 during the first ever Alliance for Financial Inclusion (AFI) Global Policy Forum (GPF) to be held in the Pacific, is a milestone to reminisce.
NRBT believes that focusing on enhancing SMEs’ access to finance in Tonga would play an important role in job creation, poverty alleviation, and promotion of exports and investment, which would consequently assist in achieving the National Tonga Strategic Development Framework (TSDF) II goal as well as the sustainable Millennium Development Goals (MDGs).
MSME Workshop held in November 2016 where the MSMEs strategy was developed
Developing and promoting SMEs’ access to finance would also support macroeconomic and financial stability, which promotes the NRBT’s vision of becoming an effective and dynamic central bank in promoting Tonga’s economic prosperity.
Therefore, in line with the Maputo Accord, the National Reserve Bank of Tonga (NRBT) in its Maya Declaration, commits to develop and improve Small Medium Enterprises (SMEs) access to finance by 20% in 2020, focusing on the agricultural, fisheries, tourism sectors, women and youth; and also to develop policies and regulations for SME finance and consumer protection and financial literacy.
To meet its Maya Declaration targets, NRBT is committed to promoting financial inclusion by developing Tonga’s national financial inclusion strategy (NFIS) to support the delivery of financial services at affordable costs to the disadvantaged and low-income segments of society, and ensuring all are financially literate and are able to make informed decision on financial services that are available.
All households and businesses regardless of income level should have access to and can effectively use the appropriate financial services they need to improve their livelihoods. This will also assist policymakers to build a resilient and inclusive financial sector and would also promote economic growth. This in turn would promote an equitable and progressive society in which the people of Tonga contribute to the economic prosperity by being financially included.
NRBT has engaged relevant key national and international stakeholders to support its financial inclusion objectives and Maya commitment journey. Coordinated efforts is acknowledged and getting the buy-in of important stakeholders such as the ministers, government officials as well as the private sectors, is crucial to ensure that this initiative will be effective.
NRBT took its time to conduct one-on-one consultations with key stakeholders early in the year in the lead up to the formulation of the NFIS. This was done with the support of the PFIP, thus, leading to an extensively consultative NFIS that has been developed with minimal assistance of technical advisors or consultants. Tonga also conducted one-on-one consultations with relevant key stakeholders in the preparation for the MSMEs working group set up. This working group will prioritize and implement the MSMEs strategies.
As a result, NRBT has drafted a Consumer Protection Policy, Non-Banks Financial Institution Bills, the MSME Strategy, and the National Financial Inclusion Strategy (NFIS).
NRBT nurturing financial inclusion awareness mainly on increasing access to finance for Micro, Small and Medium Enterprises