The role of development finance institutions in the South Pacific

Abstract

Development Finance Institutions (DFIs) in the South Pacific are very much a phenomenon which developed and strengthened in the post-colonial era. When the first settlers, merchants and planters began their exploitation of the resources of the region, the bankers were not far behind. Their concern, however, was not for the indigenous population but their fellow countrymen with assets to pledge and from whose activities income could be gleaned. It was not until the late 1950's that the first attempts were made by the British colonial administration to provide for the local population some form of development finance system in order to underpin their hesitant efforts to enter the modern economy. To this end, Agricultural and Industrial Loans Boards (AILB) were set up, initially in Fiji and later in the new Hebrides (now Vanuatu) and the British Solomon Islands Protectorate (now Solomon Islands). Managed by amateurs, starved of resources, they did little to meet the emerging needs and hopes of the indigenous people to participate in a meaningful way in the economy of their countries.