Supply Side Obstacles to Financing the Private Sector: Empirical Evidence from a Small Island Developing State
23 Pages Posted: 5 Dec 2012
Date Written: July 2011
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
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