Parliament has approved a $220 million government guarantee to back the Fiji Development Bank’s (FDB) external borrowings from March 2026 to February 2027, a move the government says will lower the bank’s funding costs and sustain lending to priority sectors. Finance Minister Esrom Immanuel told MPs the guarantee is intended to bolster investor confidence and allow FDB to continue providing medium- and long-term finance for agriculture, housing, small and medium enterprises, sustainable energy and resource-based industries.
Immanuel said the FDB’s loan book has expanded to $557.5 million, with nearly 90 percent of lending directed to those priority sectors. He highlighted that 30 percent of loans have gone to women entrepreneurs and that the bank recorded a consolidated profit of $14.2 million in the last financial year, a performance Immanuel attributed to tighter cost management, improved credit quality and higher income. The minister also said FDB’s average lending rate is around 5.5 percent and suggested that allowing the bank to take savings deposits could reduce funding costs and give it greater flexibility.
Prime Minister Sitiveni Rabuka underlined the government’s view that FDB fills financing gaps left by commercial banks, particularly for higher-risk sectors and rural communities. He described the bank as a “vital partner” in national development and economic diversification, supporting businesses, farmers and maritime communities that struggle to access conventional commercial credit.
While Opposition MPs Semi Koroilavesau and Filimoni Vosarogo broadly supported the guarantee’s objective, they urged vigilance. Filimoni Vosarogo, who is also Lands and Mineral Resources Minister, stressed FDB’s long-standing role as Fiji’s main development bank since 1967 and its function in financing activities commercial banks will not. However, former ministers and opposition members — including Faiyaz Koya — warned the government to take care amid rising fiscal exposure: Koya noted contingent liabilities now sit at 11.4 percent of GDP and said the guarantee must be matched by strong oversight to ensure funds target diversification and development priorities.
Immanuel told Parliament that FDB works closely with ministries such as Agriculture and Trade to monitor projects and to support rural and maritime communities. He said the guarantee will help lower the bank’s borrowing costs and attract investment, enabling continued support for priority sectors that underpin employment and food security.
The guarantee is the latest step in efforts to widen development finance options after FDB last year reported a strong lending push that exceeded targets and expanded rural outreach. The government has also signalled complementary initiatives to broaden financing channels for micro, small and medium enterprises, including plans for a peer-to-peer lending platform aimed at improving MSME access to credit.
Supporters argue the guarantee will translate into more affordable, longer-term finance for sectors vital to Fiji’s recovery and resilience. Critics warn that while it may unlock lending, it also increases contingent fiscal risk and calls for transparent governance, targeted lending and tight monitoring to ensure public funds leverage sustainable development outcomes.
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