You are currently viewing Women-Led Businesses in Micronesia to Get Better Access to Finance

Women-Led Businesses in Micronesia to Get Better Access to Finance

Prime Highlights

  • ADB and FSMDB have launched a $5 million financing programme for businesses in FSM.
  • At least half of the funding will support women-led small and medium-sized enterprises.

Key Facts

  • The programme will train at least 250 businesses.
  • ADB’s project marks its first private-sector initiative in FSM.

Background

Women-led businesses in the Federated States of Micronesia (FSM) will get better access to formal credit under a new $5 million financing programme supported by the Asian Development Bank (ADB) and the Federated States of Micronesia Development Bank (FSMDB).

At least 50% of the financing will be reserved for women-led small and medium-sized businesses. The programme will also provide training to at least 250 businesses to help them improve their financial and management skills.

Women entrepreneurs often face challenges in getting bank loans. A problem faced by many small firms is a lack of financial record-keeping or collateral. Lack of a proper credit mechanism may also cause banks difficulty in assessing the creditworthiness of a firm.

This program seeks to solve these problems through financing and business assistance. FSMDB will introduce a financial product focused on women entrepreneurs and help them gain greater access to formal banking services.

The bank also plans to upgrade its loan monitoring and collection systems. This digital move is expected to improve how FSMDB manages business loans across the island nation.

The financing includes a $4 million loan from ADB’s ordinary capital resources and up to $1 million in reimbursable grant support through the Asian Development Fund’s private-sector window.

The project marks ADB’s first private-sector project in FSM. It also forms part of efforts to strengthen private-sector activity and financial inclusion in the Pacific nation.

FSMDB already supports businesses in sectors including tourism, construction, agriculture, fisheries and services. The new programme is expected to help more women-owned businesses secure funding for operations and expansion.