Supply Side Obstacles to Financing the Private Sector: Empirical Evidence from a Small Island Developing State

23 Pages Posted: 5 Dec 2012

See all articles by Parmendra Sharma

Parmendra Sharma

Griffith University

Neelesh Gounder

University of the South Pacific - Department of Economics; Griffith University - Department of Accounting, Finance and Economics

Date Written: July 2011

Abstract

In light of the growing finance - private sector - economic growth findings, this article examines, from a supply - side perspective, obstacles to private sector financing in Fiji, a representative South Pacific small island, growth deprived, fragile economy. A survey of 80 percent of the formal financial sector suppliers reveals that financing the private sector may not be a major problem. However, the prevalent relationship - lending practices, good profits and well - managed risks also suggest that suppliers may be concentrating on a systematically selected small group of connected borrowers; the wider private sector, including many SMEs may be left out. Growth and development implications extend to developing economies beyond the South Pacific region.

Keywords: Fiji, South Pacific, banks, financing obstacles, small island states

Suggested Citation

Sharma, Parmendra and Gounder, Neelesh, Supply Side Obstacles to Financing the Private Sector: Empirical Evidence from a Small Island Developing State (July 2011). Available at SSRN: https://ssrn.com/abstract=2185209 or http://dx.doi.org/10.2139/ssrn.2185209

Parmendra Sharma (Contact Author)

Griffith University ( email )

Department of Accounting Finance and Economics
Griffith business School
Brisbane, Queensland QLD 4111
Australia

Neelesh Gounder

University of the South Pacific - Department of Economics ( email )

Private Bag, Laucala Campus
Suva
Fiji

Griffith University - Department of Accounting, Finance and Economics ( email )

Parklands Drive
Brisbane, Queensland QLD 4215
Australia

HOME PAGE: http://www.fijianeconomy.com

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