Investment bank a bold move, says Volavola

IF the Melanesian Spearhead Group Investment Bank (MSGIB) contributes to providing an enabling environment to help businesses through infrastructure development then it is all well and good, says Pacific Islands Private Sector Organistion (PIPSO) CEO Mereia Volavola.

However, Ms Volavola said one should always be mindful of the management structure of the investment bank and its ability to manage its balance sheet.

Ms Volavola’s comments followed the recent announcement of the proposed bank in Suva last week.

She said the move by MSG to have an investment bank was bold and believed it would have conducted a feasibility study on the matter.

“One of the key constraints in doing business in the Pacific, especially for local businesses (SMEs), is access to finance,” Ms Volavola said.

“Despite the presence of many international banks and local banks including the development banks, this problem continues to persist.

“If the MSG investment bank is able to address that then it is well and good. Based on the newspaper report, it states that the key purpose of this MSG Investment bank is to finance infrastructure which they hope will bring about the desired investment level in the country to boost economic growth and that loans are repaid on time.”

However, she said funding infrastructure was not easy and was an investment that needed to have a viable return.

Otherwise, she said the bank would have a lot of unpaid loans.