World banks back small Pacific businesses with new finance support

Small businesses in Vanuatu and Solomon Islands are set to gain better access to finance under a new partnership announced this week between the International Finance Corporation (IFC) and Banque Régionale d'Escompte et de Dépôts (BRED Bank) in both countries.

The deal, announced on 23 December, will allow BRED Bank Vanuatu and BRED Bank Solomon Islands to expand lending to small and medium-sized enterprises (SMEs) and commercial customers, at a time when many businesses across the Pacific are struggling to secure funding.

IFC, part of the World Bank Group, will provide a risk-sharing facility of up to US$10million (NZ$17.13m) through its Small Loan Guarantee Programme.

The support is backed by the International Development Association’s Private Sector Window, which focuses on investment in the world’s poorest and most fragile countries.

The arrangement means IFC will share part of the risk on new loans made by BRED, giving the banks more confidence to lend to businesses investing in equipment, buildings and other productive assets.

IFC will also provide advisory support to help both banks grow their commercial lending portfolios.

The partnership between IFC and BRED Bank is designed to unlock more lending for businesses in Vanuatu and Solomon Islands. Photo/IFC/Thomas Jacobs

Access to finance remains one of the biggest challenges for Pacific businesses, especially in small island economies exposed to cyclones, floods and other natural disasters.

SMEs play a central role in providing jobs and services, but many struggle to expand due to limited credit options.

IFC says the expanded lending is expected to support job creation not only within individual businesses, but also across supply chains and the wider economy in both countries.

Buala, a small Provincial town in Isabel Province, Solomon Islands. Photo/Facebook/Studiohomegrown Productions

Owen Thomson, Chief Executive Officer of BRED Solomon Islands, says the partnership builds on a long-standing relationship between BRED and IFC and reflects the bank’s growing role in the region.

“As the leading bank in Vanuatu and a growing presence in Solomon Islands, BRED is uniquely placed to help drive growth and resilience across SME and commercial markets. BRED and IFC have a long-standing global strategic partnership with a successful track record of collaborating on projects,” Thomson says.

He says the new support would allow the bank to reach more local businesses that are key to economic growth.

“We welcome this investment, which will enable us to expand our business-segment financing portfolio in Vanuatu and Solomon Islands, supporting the small businesses that are fundamental to growth in these economies,” Thomson says.

From IFC’s perspective, the partnership is aimed at closing a clear financing gap facing Pacific businesses.

“Many SMEs in Vanuatu and Solomon Islands struggle to access the capital they need to grow, hire, innovate, and fully contribute to their economies,” Allen Forlemu, IFC’s Acting Regional Vice President for Asia and the Pacific, says.

“With this investment, IFC aims to increase lending to SMEs and commercial segment borrowers in Vanuatu and Solomon Islands and reduce the financing gap in both countries, clear actions to drive economic growth and create jobs,” Forlemu says.

BRED Bank operates across several Pacific markets, including Vanuatu, Solomon Islands, Fiji, New Caledonia, and Tahiti. IFC works in more than 100 countries and is a major source of private sector finance in developing economies.

For Pacific governments and communities focused on recovery, resilience and employment, the partnership signals fresh momentum behind local business growth at the end of 2025.