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Launch of the 2011 FDB small business awards:Growing Fiji
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30 August 2011

Statement by the Permanent Secretary for Finance Mr. Filimone Waqabaca

The CEO of FDB – Ratu Deve Toganivalu
Sponsors of this Programme
Distinguished guests
Ladies and Gentlemen,

Ni sa bula vinaka , Namaste and Good Morning to you all.

I am honoured to be part of this event this morning. This prestigious event is a great way to celebrate and reward small business owners for their entrepreneurial efforts and contributions to the Fijian economy. You are a critical player in our effort to Grow Fiji.

I take this opportunity to also commend the management and staff
of the Fiji Development Bank for the hard work put into making the Awards a permanent feature in the annual business calendar. Many have realized their potential, skills and dreams through your programme and support of this important sector – the small businesses. Living standards have thus improved and families able to enjoy the basic necessities in life of a roof over their heads, food on their table, educated children, proper sanitation and clothing. Your programme has allowed many to overcome poverty.

Having said this, it is my hope that other financial institutions in
Fiji will support the establishment and development of micro,
small and medium enterprises in Fiji through tailor made and packaged financial products that best suit such operations or businesses.

Ladies and gentlemen:
To provide some context on the importance of small business development, I would like to spend a few minutes reviewing the Asian experience.

It is a well known and widely accepted fact that small businesses
play a vital role in any country, particularly in terms of raising economic growth rates. In Asia, small and micro businesses make up the bulk of employment and are the cornerstone of Asia’s entrepreneurial dynamism. Accordingly, Small and Medium Enterprises or SMEs’ contribution to Gross Domestic Product (GDP) can be as high as 60 percent. For those of us that have visited some of these countries, we can attest to these statistics just judging by the crowded roadsides with hawkers selling all kinds of products.

The CPA Australia Asia-Pacific Small Business Survey 2010
,
which took into account small businesses from Australia, Hong Kong, Singapore and Malaysia, revealed critical facts about the benefits of SMEs. The Survey results supported the view that the economies of this region proved more resilient in weathering the global economic downturn and are now well-placed to grasp any upswing. Small businesses are key economic drivers and their state of health is not only an indicator of broader economic performance but a catalyst for such performance.

A very quick comparison with the local scene will tell you that Fiji
has a bit of catching up to do in terms of SME development. We are only just beginning to see the small business trend taking hold. Media reports have also highlighted the success of small businesses for example, women’s groups that have secured income streams from engaging in small businesses such as sewing, handicrafts, baking and horticulture.

Even in our local neighbourhoods, we can conveniently find mini
markets. Financial institutions and NGOs are also scaling up lending and awareness programs for SMEs. This is all very encouraging. But it is not enough and well below our true potential.With the support of the financial institutions and in partnership with Government, we can lift the contribution of small businesses to growing the economy, similar to what is witnessed in Asia.

Small businesses make up less than 10 percent of our economy.
The potential in these small businesses for us is therefore huge. This sector is the answer to the employment gap that the formal sector cannot fill. Rough estimates put close to 60 percent of Fiji’s labour force as being involved in various forms of business that fall under the heading of small and micro enterprises.

The upside is this - small businesses do not always stay small.
They can grow into medium and big businesses. Just last week, whilst in Ba visiting some industries, I listened to the struggles and incremental steps taken by the Vinod Patel family to build, what is today, a household name in the hardware industry. Many of our major retailers like Tappoo, Punjas and Motibhai started from very humble beginnings as well. So have many other prominent businesses today. This should both challenge and motivate us.

This means that, with determination, perseverance, commitment,
sacrifices, prudence and hard work, anything is possible. The small businesses epitomize these characteristics. When these small businesses grow, they support our exports, use our local resources, help reduce unemployment and add to investment. You small businesses impact the lives of others by generating employment for them. They can be your neighbor, your families or even your community members.

But, small businesses also need support to grow, for they too face
challenges like any other operation.

In today’s competitive environment, small businesses often
encounter challenges, the most common being access to affordable finance. FDB’s role in the provision of finance to support this sector is therefore acknowledged and appreciated. Capacity building to improve skills of small businesses is also critical. Again, FDB and financial institutions that provide finance to SMEs can also provide this service. For it is in their interest to recover the funds they loaned their clients. The NCSMED is also an up-skilling institution for this sector.

Another notable challenge is the ability to absorb and respond to
external shocks that often impact demand for goods & services. Similarly, the lack of access to markets is another challenge. In this regard, I would urge established and big businesses to consider and support the small businesses and provide a market for their produce.

Government in recognition of the true potential of SMEs is
working towards ensuring that such challenges are addressed appropriately by encouraging financial institutions to develop products that are geared towards supporting this sector. Such action complements Government’s own funding initiatives provided through the Fiji Development Bank under the following subsidy schemes:
  • Subsidy Grant to all citizens ($2.5m);
  • Interest subsidy for Northern Development Projects ($0.55m);
  • Interest Subsidy for Small Business Scheme ($0.45m); and
  • Subsidy Grant for Economic Rehabilitation Package (ERP) ($0.3m).

Government also provides income tax exemption for SMEs in
Agriculture & Fishing, Tourism, Community & Social Services and supportive projects to the Tourism Industry, with a maximum turnover of $300,000.

On the other hand, the Reserve Bank of Fiji (RBF) is working with
commercial banks on the provision of loans to SMEs and financial literacy services. Commercial banks have set up microfinance units in all branches beginning in 2010.

Fiji is well capable of cultivating and processing produce such as
rice, potato, honey, pawpaw, pineapple, and bananas to name a few. We also have skilled crafters who showcase Fiji’s culture and heritage through authentic handicrafts. Fresh and processed produce, handicrafts and niche products such as coconut virgin oil and noni juice are some products where SMEs can also develop a comparative advantage.

In support of this, Government launched the “Fijian Made and Buy
Fijian Campaign” with an allocation of $200,000. The initiative primarily aims to promote Fijian made products and produce, both domestically and internationally through a nation branding strategy. The campaign also promotes production of goods for exports which in turn, reduces our reliance on imported products.

Overall, this campaign is a concerted effort by Government and the
private sector. The future for this development, we believe, is deeply rooted in the growth and enhancement of SMEs.

This year’s Awards theme, Growing Fiji, therefore aptlycomplements Government’s efforts.

We firmly believe that small businesses are the bedrock of new
economic growth and that it has a strong role to play in improving livelihoods through income and employment generation.

To illustrate this point, I revisit the success stories from the 2010 Small Business Awards.

Ms. Pushpa Lata, the winner of the Manufacturing Division, used
FDB’s micro finance loan facility to start up her tailoring business.

To meet the growing demand for her service, she again secured
FDB financing for a delivery van to transport her orders.

Mr. Laisenia Ketedromo, a reformed prisoner and farmer for the
last 5 years, was the winner in the Agriculture Division. A semi commercial farmer of Yaqona and Dalo in Bua, he employs other villagers on a casual basis.

The winner in the Tourism Division, who was also the overall
winner last year, Ms. Adi Rebeka Saukuru, of Adi’s Handicraft Centre in Lomawai, was able to start her business in 2008 with assistance from FDB’s loan facilities. Today, her business not only sufficiently provides for her family’s needs, it also creates employment for nearby villages of Togobula & Lomawai.

Ladies and Gentleman;
Three (3) of five (5) winners of the 2010 Small Business Awards were active users of FDB facilities and attests to the positive flow on effects of economic activity generated from small businesses. I am aware that I may well be preaching to the converted here.

This year, I am also very pleased to note that, in addition to the five
traditional categories of Agriculture, Manufacturing, Tourism, Wholesale/Retail and Professional Services, the Bank has added two new categories to the mix: Best Business Practice and the Special Award.

The Best Practice Award will be given to that entry that shows exemplary record keeping for its business and the Special Award will be presented to the entry that shows business innovation and/or environmental consideration.

It will be remiss of me not to acknowledge the valuable
contribution of the partners of these Awards for their ongoing sponsorship – the Fiji Times, New India Assurance, the Reserve Bank of Fiji, Sun Insurance, Crest Chicken and Joe’s Farm.

Looking at the remarkable achievements last year, I am positive
that the 2011 Small Business Awards will definitely showcase and highlight even greater success stories of small business development and growth in Fiji.

I extend my best wishes to the contenders of this year’s
competition and I now take great pleasure in officially launching the 2011 Small Business Awards.
Vinaka Vakalevu.
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