17 March 2021
Mr. Norbert Mumba, Deputy Executive Director, Alliance for Financial Inclusion,
The Chairs and Co-chairs of the SME Finance Working Group (SMEFWG) and Financial Inclusion Data, Working Group (FIDWG) Working Group, Policy Managers and Technical Experts,
Members of the AFI Team, Members of the SME Finance and Data Working Groups, Speakers and Presenters, Ladies and Gentlemen, A very good evening to you all from Port Vila, Vanuatu in the South Pacific.
As Co-host, the Reserve Bank of Vanuatu would like to warmly welcome you to the first SME Finance and Data working group virtual meeting of 2021. We would have loved to welcome you in person to our tropical paradise as planned in 2020, but due to the Covid-19 pandemic, a virtual meeting will have to suffice.
This pandemic, and the subsequent close-down of borders and social distancing, has seen the world transition into the ‘new normal’. The impact of the pandemic on economic growth, employment and the banking sector in small countries like Vanuatu have been severe especially for those countries within our region that are dependent of tourism. We believe that growth contracted in Vanuatu in 2020 and projected to rebound again in 2021 into positive territory but there are significant risks to this outlook. The impact of the pandemic on the banking will become clearer once the dateline for the deferment loan repayments and treatment on loan classification comes to an end in mid-2021. Transportation, employment, education, healthcare and business operations have also been affected within the last 12 months as we have had to adapt to the changes as best as we can.
Not only do we as individuals have to adapt to the new change but our respective institutions and organizations also have had to ‘adapt’ to the new normal. For central bankers, the pandemic gave rise to the implementation of new policies, frameworks and guidelines globally.
As such, central banks have had to do more than manage inflation and interest rates as was their basic traditional role in the economy. The Reserve Bank of Vanuatu, much like central banks in the region, have had to consider unconventional policy responses as part of the COVID-19 policy response. Central banks are now also required to keep pace with the rapid
transformation in societies be it in relation to the Covid-19 pandemic and the new normal, gender equality financing, FinTech, green finance and even this gathering’s specific interest of supporting SMEs.
It is a widely known phenomenon that the growth of SMEs enhances the growth of an economy. Within our region of the Pacific island, they are an important source of growth and employment but face significant constraints not only in accessing credit but a myriad of problems that prevent them from reaching their potential in the economy. Hence, central banks deem it important to support SMEs through the different policies and guidelines that it implements within its respective jurisdictions.
It is equally important to measure the effectiveness of those policies and guidelines through the collection of data. Data collection and analysis determines the design of a policy and its effectiveness in achieving its goal.
SME access to finance is an important initiative for the Reserve Bank of Vanuatu, thus we are excited to Co-host and participate in these working group discussions so we can glean from member countries, peer reviews on policies that were effective, the best way to measure certain initiatives and how certain initiatives can be implemented differently the next time.
I am sure other member countries will share the same sentiments and agree that these working group sessions are informative and practical to our respective roles.
On this note, I would like to thank AFI for its continuous support and for giving the Reserve Bank of Vanuatu the opportunity to Co-host the virtual working group meetings.
I would like to end by wishing all participants a fruitful discussion and hope this meeting yields positive influences on our respective institutions, our countries and regions in general.