small-holdings

Chance for small-holdings

THE World Bank is looking at de

veloping small-scale development

guidelines suited to South Pacific economies. South Pacific Trade Commis sioner Bill McCabe said the bank sent a

team through the region in February,

and recently invited him to discuss the

project more fully.

The proposal is for the bank’s subsidi ary, International Finance Corporation, to assess small business proposals which are unable to raise local financial back ing. The corporation will not be provid ing the money itself, but will bring in the skills necessary to help business people develop what McCabe calls bankable documents. “It will be a matter of hold ing the company’s hands in the initial stages,” he said.

In the past, the corporation’s mini mum sized project was about SUSS mil lion, which meant that few businesses in the Pacific island states would qualify.

The new scheme would be looking at projects as small as $250,000 in initial capital. McCabe said it was not until the

World Bank team visited the region that the international agency realised the need for a scaled-down programme.

The problem is not money rather, it is finding sound projects. That is why International Finance Corporation will

concentrate on providing help in shap

ing projects rather than putting money

up itself (although it may take a small equity share in some business opera tions). Fiji, for example, has a banking system with substantial cash reserves, and even the smaller countries send money abroad for investment because of the lack of local opportunities.

Banks, said McCabe, will be more will ing to lend to local projects if the World Bank is involved. The bank’s finance corporation could take a 10 per cent equity share and have a representative on the board of directors of the new companies which would make bank man gers feel a great deal more comfortable.

Existing official aid programmes tend to be more geared to government-linked projects. McCabe believes the new World Bank initiative will provide the missing link in the Pacific the expertise needed at the level of private business to generate local capital formation and pro vide the management support in the first crucial years of new business ventures. □