Micro, small, and medium enterprises (MSMEs) are believed to contribute to at least 18 percent of Fiji’s GDP. Now, what is the contribution after the GDP shrunk by 15.7 percent in 2020? What is the approximate number of MSMEs in Fiji? How many are owned or co-owned by women? How many are in the rural areas? How many MSMEs are owned or directly assists/involves people living with disabilities? These are all important questions that cannot be answered because of one glaring problem – the absence of reliable data. This leads to another critical question that poses as the ‘elephant in the room’? How can we be assured that policy interventions at the state, local and international level (through development partners) are working, without evidence?

There have been various programs for MSME development, but it is difficult to ascertain its effectiveness on a sector level let alone on the national level without statistics. Recent targeted research conducted jointly by the development partners and the Reserve Bank of Fiji in 2018 and 2019 revealed that MSMEs still face similar challenges on access to finance, markets, and information and apart from the reduction in costs of registering a business, very little improvement can be confidently pointed out to have created an enabling environment for MSMEs.

Anecdotal evidence suggests that many MSMEs in Fiji struggle to remain afloat. Commonly, their life span is hardly 2 years. While the global pandemic created new opportunities for workers that were laid-off from various sectors particularly the tourism industry, Government interventions returned mixed results mainly because of lack of relevant data to help tailor solutions for these policy interventions.

Capital is limited and registering a business is problematic. Fiji was ranked 163 in “Starting a Business” and 165 in “Getting Credit” out of 190 economies under the World Bank Doing Business Survey—among the lowest in the world. This analysis includes large corporations so we can only imagine how much harder it might be for MSMEs to register their business and access affordable finance. A way to bridge the gap is via Government/NGO programs or access to affordable finance. A finance gap of around FJ$2.2 billion has also been estimated for Fiji, confirmed by research conducted by the Market Development Facility.


In Fiji, various agencies collect MSME information for diverse purposes like registration, superannuation contributions, taxes, financing, and government programs. However, there’s a lack of data harmonisation to categorise enterprises collectively under the existing MSME definition in Fiji.

Secondly, the current MSME definition and policy framework was drawn up to provide a base reference in the absence of dedicated legislation after the existing law was repealed in 2020. There is also an urgent need to review the legislative structure, mandate of Government, and define through legislation the responsibilities of the Ministry which can include a provision to collect MSME-related information.

Moreover, in terms of financing, there is limited understanding of risks and opportunities to help develop affordable financing alternatives. Commercial bank loans to the MSME sector hovers around 9 percent of total private sector lending over the last three years with most of their product portfolio targeted toward large corporates. The legislative environment is restrictive with crowdfunding or capital raising by private companies not being permitted under the Companies Act 2015, and anecdotal evidence supporting that peer-to-peer lending only exists within conglomerates and family members of high-net-worth individuals. Moreover, data collection programs by different agencies are irregular and are not specifically structured to inform MSME development initiatives.

Considering what we know with the current data and the two specific research conducted in 2018 and 2019 on MSMEs, there was a particular solution discussed on setting up a dedicated MSME Institution. This is to enable access to affordable financing options to help MSMEs sustain the business cycle especially after structural shocks as the current financial service providers deem the sector too risky, whether it is due to the lack of information from the enterprises, or lack of understanding from the financiers.

A feasibility study was conducted to determine that there is room for a dedicated financial institution. This potential solution will need the development/enactment of legislation to setup a financial institution, determining the cost and personnel structure, securing funding, recruiting personnel, considering licensing/prudential concerns of the regulator, developing products, and underwriting customers. It is safe to say that it can solve the problem, but more of a medium to long-term goal.

Without adequate data, it is unlikely that other solutions will succeed in improving the conditions for MSMEs to thrive.


From a policy perspective, it would be useful to engage the agencies already collecting MSME-related information, develop indicators and agree on periodical collection of data to collate MSME-related statistics. Building on the recent research, key indicators to collect are the number of enterprises, ownership by gender, age and location, annual turnover, number of employees, whether enterprises can access and can afford finance, and indicators that allow to determine the financial health of MSMEs and on macro-economic indicators like MSME contribution to GDP. This can be added to the existing Establishment Survey or be developed into a separate periodical survey. This will be the first time these data points are harmonised specifically for the benefit of shedding light on MSMEs.

These indicators once aggregated and anonymised will also be made available in the public domain to encourage further research with academics, information sharing and program implementation with development partners and other interested stakeholders in the MSME space.

This initiative is now part of the deliverables under the National Financial Inclusion Strategy 2022-2030 and a series of meetings will be set in motion from August 2023 to see this through. In the interim, the development of a concrete set of indicators will be prioritised and this draft will be discussed within the MSME Finance Working Group Membership which includes representatives from Government, the financial service providers, and development partners.

Tourist arrivals have given Fiji hope with the economy estimated to have recovered by 20.0 percent in 2022 and forecasted to grow by an additional 8.0 percent in 2023. The coalition government has given more prominence to MSMEs naming it under the portfolio of the Deputy Prime Minister and the enterprises are visibly being consulted more for solutions. We can leverage this momentum by enabling the access to reliable data which will provide an opportunity to address a key prerequisite to understanding and assisting the sector through impactful reforms.


Sakiusa Nabou, Research Assistant, PICDPR (on study leave at Griffith from Reserve Bank of Fiji).

The views expressed in this article are that of the author(s) and do not necessarily represent the position of the above-mentioned institution. For more information about Pacific Island economies, visit Pacific Island Centre for Development and Policy Research.