The islands of the South Pacific have experienced a significant number of natural disasters in the last twenty years and have been impacted by climate change in ways that have put their natural resources and populations at risk. How are they responding, and how is microfinance impacting financial inclusion and poverty reduction?
Different island nations have different resources and economic models. Some have significant forest and mineral resources; others, such as Fiji, have developed a manufacturing base. Others rely on significant marine resources. The movement of populations from village-based to cities has occurred slowly, and with different degrees of social disruption.
Vanuatu is developing innovative agricultural cooperative and producer models, as well as city-based microfinance. Unlike other neighbouring nations, Vanuatu does not have either a significant manufacturing base, nor do they exploit their marine resources for export. They still have a significant amount of the population living in villages, and the village is still the basis of the economy. But with the challenges of climate change and a growing population, food security and economic opportunity are concerns.
Vanuatu does have a small beef export industry, but the majority of agriculture remains subsistence farming. There are some cooperatives that have developed commodity products for export, specifically cacao, but the majority of agriculture remains subsistence. Cooperatives and producer organisations are sharing resources, particularly for transportation infrastructure and storage development, and education and material resources to further diversify crops. Most of these cooperative and producer organisations are microfinance funded.
One of the first microfinance cooperatives in Vanuatu was not village or agriculture based, however. The Vanuatu Women Development Scheme was first started in Port Vila, the capital, in 1996. With the goal of improving poverty and opportunity through income-generating activities, the scheme provided microloans, savings schemes, education and leadership training. The organization has continued to grow, and is now partnering with Habitat for Humanity to develop and build affordable housing options in the nation.
Microfinance is being provided by both government and private organisations, including the Reserve Bank of Vanuatu, and is well-accepted in the community. Industry stakeholders are focusing on financial inclusion, as well as income generating opportunities and savings options.
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