We thoroughly analyzed the trust deed, the fund allocation process, and the partnership between the banks and SBEC, which resulted in a significant overhaul of SBEC, its governance, and operations. Our efforts led to SBEC adopting a revised trust deed, a simplified and faster allocation process that avoided previous bottlenecks and failures, and a productive partnership between the banks and SBEC that enhanced the support and guidance for the applicants throughout the loan application. All these changes helped applicants to choose, design, and maintain their businesses more effectively for the long term.
— Samoa —
loan. guarantee. scheme.
Loan Gurantee Scheme in Samoa: PPP approach with private sector financial institutions backed by government guarantee fund and a charitable business training arm
“Opportunities don't happen, you create them.” - Chris Grosser
Challenge
SBEC is a charitable trust founded in 1965 to support micro, small, and medium-sized enterprises (MSMEs) in Samoa, which play a vital role in the country's economic development and job creation. However, many MSMEs, especially those led by women, face challenges in accessing finance due to various factors, such as economic conditions, regulatory barriers, and socio-cultural norms. As a result, 49 percent of the population in Samoa is financially excluded, with 34 percent having no access to any financial services and 15 percent relying on informal financial services. SBEC's main objective is to provide training and skills development for small businesses, help them assess their business ideas' feasibility, and prepare bankable proposals that qualify for a Credit Guarantee Scheme and access to bank loans. Our challenge was conducting a comprehensive review of SBEC's operation and governance and identifying areas for improvement in its strategy, structure, governance, management, or operational processes.
Strategy
We leveraged our global expertise in finance, insurance and risk, and policy, legal and regulatory matters to conduct a comprehensive assessment and propose any revisions to (i) the founding Charitable Trust Deed to enhance governance, strategy, purpose (role and function) and its legal foundation, (ii) the memorandum of understanding between SBEC and the participating lending institutions, (iii) the collaboration between SBEC and Reserve Bank of Samoa and Ministry of Finance who were accountable for settling any claims from the financial institutions on the Loan Credit Guarantee Scheme; (iv) the strategy, operations and execution plans for the SBEC secretariat in charge of daily operations; and (v) the loan documentation supporting the scheme.