TONGA DEVELOPMENT BANK LAUNCH NEW MICROFINANCE LOAN SCHEME
This is a project funded by Asian Development Bank under the Japan Fund for Poverty Reduction (JFPR) Grant Assistance Project 9151: Social Protection of the Vulnerable in the Pacific (Tonga). Ministry of Finance (MoFin) is the Supervising Agency and Tonga Development Bank (TDB) is the Implementing Agency.
As part of the JFPR Grant project, ADB has allocated US$280,000 of which US$80,000 is reserved for training and business support and US$200,000 is reserved for lending and it will be administered as a self revolving scheme.
This funding scheme aims at achieving the goals of a social sector project empowering the vulnerable in Tonga, especially unemployed women to improve living standards through microcredit opportunities and associated finance and business skills training (including credit advisory in case of defaults).
TDB implements the ADB_JFPR Microfinance Revolving Fund as an independent scheme from TDB’s other lending procedures. Special loan condition is applied to loans for both individual and group borrowers. Lending commenced in November 2013 in the Outer Islands including Vava’u, Ha’apai, ‘Eua and continuing to the rural villages in the main island of Tongatapu.
The purpose of the project is to empower the vulnerable in Tonga especially women in the Outer Islands and disadvantaged communities in Tonga with previously limited access to microfinance services. The Fund focuses to support income generating activities and provide incentives to change behaviour’s of target women, such as savings habit, financial and business planning, and entrepreneurship for income generation and welfare improvement.
Women are the main beneficiaries for this assistance. Women aged 18-64; unemployed women, widows and single mothers are eligible. This is to encourage income generating activities and improve living standards. However, unemployed men are eligible too at a minimum number.
Feedback from the people who have received assistance from this fund has already positively reflected the value of this Fund to Tonga.
Kolokesa Paunga, TDB Senior Loan Officer conducting training for clients at Vava’u Branch office