A compelling story has emerged from Fiji, highlighting how a group of Micro, Small, and Medium Enterprises (MSMEs) united to challenge the banks over changes they believed would disrupt their operations. This initiative originated from the Fiji Micro Small and Medium Entrepreneurs Community (FMSMEC), known for its active engagement through a Viber group. The members recognized early on that the planned phase-out of cheques by commercial banks could lead to significant disruptions for MSMEs.
Raising awareness about this pertinent issue is crucial for fellow business owners and stakeholders. Concerns were first shared in an article published in The Fiji Times in April 2024, underscoring the welcome that digital transformation could bring to MSMEs, their customers, and suppliers, but also pointing out the problematic implementation of the cheque phase-out.
The Reserve Bank of Fiji (RBF) stated that the initial proposal to phase out cheques was submitted by the Association of Banks in Fiji (ABIF) in December 2021 and was later approved by the government without consulting the MSME sector. The ABIF and RBF announced that the actual phase-out process would begin in 2024. The announcement raised alarms among FMSMEC members, who felt the transition was being implemented without adequate consultation and amidst ongoing challenges with existing digital payment platforms.
In March 2024, a member’s call to action on their Viber group sparked extensive discussions, ultimately forming a working group to lobby against the cheque phase-out. Sharing experiences, members highlighted the lack of nationwide consultation and the difficulties they faced with current digital payments, particularly when transacting with larger companies. The collective concerns prompted a coordinated effort to engage with banking authorities.
As a result of these discussions, the ABIF adjusted the proposed timeline, shifting the phase-out date from April to July 2024 for new cheque book issuance, with a complete cessation of cheque processing planned for January 2025. This response signified that the lobby was gaining traction.
The FMSMEC communicated their concerns formally to the RBF Governor, leading to a commitment from the RBF to undertake a consultative approach with all stakeholders. This marked a critical step in the lobbying strategy, with the RBF acknowledging the need for better awareness among financial institutions regarding the readiness of MSMEs to transition away from cheques.
Despite the progress, the FMSMEC remained concerned over continued lack of engagement with MSMEs. They noted that significant legislative changes were necessary to effectively implement the phase-out, yet the government had not publicly prioritized these amendments.
A pivotal moment came when the RBF held a full-day awareness session in April 2024. This event enabled the FMSMEC Working Group to communicate their real-life challenges associated with transitioning away from cheques. In June 2024, the ABIF announced the revocation of their earlier timeline, responding to the feedback that more consultations were essential.
The experience showcases the importance of consulting MSMEs on decisions that significantly impact their businesses. The FMSMEC’s efforts underscore the need for a holistic approach to financial modernization that benefits all stakeholders. Their success story serves as a model for other MSME networks faced with similar challenges, underlining the value of collaboration and advocacy in effecting meaningful change.