Small Business Development Project — Samoa's Loan-Guarantee and Business-Advisory Scheme for Micro and Small Enterprises

Following Samoa's 1996 economic reforms and given that over 80% of Samoan businesses had five or fewer employees and roughly 80% of land was under customary communal ownership (limiting bankable collateral), the Asian Development Bank approved a $3.5m Special Fund loan on 21 November 2000, plus a $500,000 technical assistance grant.

Expand access to finance and business support for micro and small enterprises via four components: a loan-guarantee scheme, a pilot microfinance facility for women, business advisory and training services, and policy/legislative reform; a further $400,000 was earmarked for a venture capital fund.

The Small Business Enterprises Centre (SBEC) administered guarantees through four commercial banks and the Development Bank of Samoa; the Ministry of Women, Community and Social Development and Women in Business Development Incorporated (WIBDI) ran the microfinance pilot.

By FY2006 the guarantee scheme had issued 538 guarantees (91% of its five-year target) worth ST7.1m (82% of target); after extension it reached 838 guarantees worth ST11.6m, covering ST15.8m in loans, by FY2008. In its final year, the microfinance facility channelled loans to 655 women borrowers.

Despite these volumes, ADB's Project Performance Evaluation Report — based on a 300-beneficiary survey — rated overall performance only 'partly successful' (partly relevant, less effective, less efficient, less likely sustainable). The venture capital fund and a planned credit bureau were not commercially viable and were dropped, WIBDI finished with 23% of loan balances in arrears, and an independent 2009 NZ MFAT-commissioned evaluation corroborated a mixed verdict: genuine positive livelihood impact alongside high arrears and business-advisor caseloads exceeding 200 clients that undermined the intended mentoring.