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L. Joseph
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APIA, SAMOA, December 8, 1999 —The Pacific Islands Investment Fund (PIIF)—established in 1995 by the International Finance Corporation to provide financing for small and medium enterprises in the Pacific Island countries—recently completed a new investment of US$100,000 in the National Bank of Samoa (NBS). PIIF invests in projects that have a positive developmental impact and are based in IFC's ten member countries in the Pacific Islands—Federated States of Micronesia, Fiji, Kiribati, Marshall Islands, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, and Vanuatu.
Established in 1995, NBS is the first and only commercial bank in Samoa wholly owned by Samoans. Its shareholders include more than 50 local business people. NBS focuses on supporting indigenous businesses, mostly small and medium enterprises, and has grown rapidly since establishment. As of September 30, 1999, the total assets of NBS reached Samoan tala 26 million (about $8.7 million).
PIIF's investment in NBS will be in the form of a subordinated convertible loan for its own account in Samoan tala. The project is part of a broader effort to strengthen NBS's capital base to assist in meeting the Central Bank of Samoa's capital adequacy requirements. In addition, PIIF's investment will help mobilize resources to strengthen NBS's technical infrastructure which will support expansion of its banking services.
The New Zealand government through its trust fund with IFC has been assisting NBS with institutional strengthening—initially with development of the bank's treasury and currently with a 12-month program covering all aspects of training, treasury implementation work, credit risk assessment, and strategic planning at board level.
The project is part of PIIF's larger strategy to reinforce the financial sector in Samoa, said Mr. Graeme Rothwell, regional manager of the South Pacific Project Facility (SPPF).
Based in Sydney, Australia, and managed by IFC, SPPF was established in 1990 to provide assistance to entrepreneurs in evaluating and structuring investment opportunities, preparing business plans, and obtaining project financing. SPPF, which does not invest in projects, is funded by the governments of Australia, Fiji, Japan, Kiribati, New Zealand, and Samoa, as well as by IFC.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.