Welcome Address by Board Chairman, Mr. Bob Lyon, at the Fiji Development Bank’s 50th Year Anniversary Launch
Grand Pacific Hotel, Suva Friday, 28 July 2017
The Prime Minister of Fiji – Hon. Josaia Voreqe Bainimarama;
The Speaker of Parliament- Hon. Dr. Jiko Fatafehi Luveni;
Our Line Minister, Attorney-General Mr Aiyaz Sayed-Khaiyum
Your Excellencies, Members of the Diplomatic Corps;
The FDB Board of Directors, Management & Staff, and
Ladies and Gentlemen, Bula Vinaka, Namaste and a very good evening to you all.
It is my great pleasure to welcome you all to the launch of the Fiji Development Bank’s [FDB] 50th anniversary celebrations.
On behalf of the FDB family, I would like to extend our heartfelt gratitude to the Prime Minister for accepting our invite to be our chief guest at this milestone occasion. Welcome, sir.
And a special welcome to our Line Minister, Hon. Mr. Aiyaz Sayed-Khaiyum – Attorney-General and the Minister for Economy. Minister, thank you for joining us.
I also welcome our customers who have been our business partners in progress for many years including a Dairy farmer, Ms Chandra Lekha from Naitasiri who joined the Bank in 1976. Let us put our hands together for our clients, ladies and gentlemen.
Also, I would like to acknowledge our staff and former staff some of whom have spent the best part of their career with the Bank and have retired and those who have moved on to take up higher positions in government, private sectors and other institutions and abroad. Their presence tonight shows they are still passionate about FDB as a family.
As Board Chair, I am honored to share this momentous celebration with you all.
A journey of 50 years, ladies and gentlemen.
A journey that started on 1 July 1967, sixteen years after development banking started in Fiji with the Agricultural and Industrial Loans Board. And the journey ahead of us with the launch of our three-year Strategic Plan 2018-2020 this evening brings to mind what the first FDB Chairman Mr. H. P. Ritchie said during FDB’s establishment. He said (and I quote) “The creation of the Bank did not merely constitute a change of name. It was a momentous occasion and an important event in Fiji’s programme of development” (unquote).
Today, FDB has been able to position itself as an innovative and dynamic development financial service provider that significantly contributes to the economic development programme and especially for the agriculture sector and the rural areas
The new strategic plan will also serve to reinforce FDB’s mandate of providing financing that contributes to the development of the Fijian economy leading to the enhancement of the quality of life for all Fijians.
FDB will continue to pursue its mandate by focusing on inclusive growth for all Fijians, environmentally sustainable development and forging public private partnerships promoting the growth of the small and medium enterprises, development of the rural-agro sectors and the growth of the industry and commerce sectors.
But our journey, ladies and gentlemen, has not been an easy one. We have, like any other organization of a developing nation, stumbled upon a number of challenges caused by either political, economic, environmental or social factors. But we– WE were adamant. We remained committed to our mandate. We grew. And we grew Fijian businesses and Fijians with us. We became “Partners in Progress” of Fijians across generations.
Ladies and gentlemen, the Bank’s first equity investment was acquiring 50,000 shares in Fiji Industries Ltd in 1968- which is still serving the country today. FDB had its first off-shore borrowing from the Asian Development Bank in 1973. The following year was a ‘remarkable’ one with rapid acceleration in the growth of loans mainly in the agricultural sector, which represents 44% of Fiji’s total Agricultural lending today.
The Bank’s portfolio grew to $51.7 million in 1980, the same year in which FDB assisted an expansion programme of the Rewa Co-operative Dairy Co. Ltd, a business partnership that is still existing today.
Bank portfolio totaled $56.5 million in 1981 and in 1983 lending soared from a forecast figure of $19 million to $40.1 million. This increase was attributed to new loans resulting from a number of policy initiatives launched by the Bank to widen its role in development.
In fact, this is nothing new for the Bank. But before I speak any further of our development role. I take this moment to, proudly, announce that the Bank’s portfolio standing today is at $438M.
Records reveal that women clients were being assisted with loans of over $2.6 million from as early as 1979. The New Zealand Small Loans Scheme that was established in 1989 was for the sole purpose of providing soft loans for income generating projects especially targeted at rural women.
In 1995 a Lease Financing operation was launched to widen the Bank’s business base. This facility was to provide finance for commercial vehicles, heavy equipment, plant & machinery, office equipment and aircraft. In 1996 FDB introduced yet another new product, its Working Capital Facility following the positive response to its lease financing facility.
The FDB was instrumental in the set-up of the Unit Trust of Fiji and the Suva Stock Exchange, now known as the South Pacific Stock Exchange and our Branches are still serving the rural community investing under this scheme.
The Bank has been supportive of all sectors. Sectors such as communications held shares on behalf of the 14 Provinces in the setting up of Fiji TV until the establishment of the Yasana Holdings as well as the FBC and FM stations.
Without mentioning names, many of the large corporate businesses today have had startup relationships with FDB.
In 2000, FDB strategized its customer services by adopting the “Becoming Customer Driven” approach. Through this policy approach, FDB was the only bank in the country that conducted free training for clients engaged in small commercial and agricultural projects to better equip them with skills to manage and grow their businesses.
And, yes, today we are better positioned to reinforce our support for capacity-building for local exporters and the growth of small and medium enterprises, as well as the development of the financial sector through empowering financial inclusive and literacy programmes.
In 2001, the Small Business Scheme was initiated by the government to provide loans carrying interest subsidies for all other communities that do not qualify for the Special Loans Scheme at that time. Similarly, in 2001 the Small Business Equity Scheme was established for small businesses which were unable to meet the equity contribution requirement of 20% for total project costs.
To encourage establishing businesses specifically in eco-tourism, fishing and forestry sectors, in 2002, the Seed Capital Revolving Fund was also initiated. And a Special Northern Division Loan Facility was implemented in 2004 to boost economic growth in the Northern division and to assist in curbing population movement to Viti Levu. The Bank in the same year launched its popular Small Business Award Competition aimed at encouraging the growth of small businesses. The Award has been fine-tuned over the years and the Small and Medium Business Enterprise Awards will be revamped and launched this year. We are looking at including more innovative incentives for our Small and Medium Business entrepreneurs.
The Bank introduced a Social Banking facility in 2008 to provide cash to alleviate short and long term financial burdens through the implementation of enterprise for alternative livelihoods with the long term view of alleviating poverty. The Bank was awarded by ADFIAP (Association of Development Financing Institutions in Asia and Pacific) for enabling greater financial inclusion in Fiji in 2013 through this Facility.
But with easy access to financing was not always available to everyone and our clients faced the challenge of being excluded from the financial sector.
To address this in 2006 FDB launched its savings conscious programme at the grass root levels with the Money $mart Programme, which is currently part of the core curriculum of schools across Fiji. The programme was designed to not only teach children and youths about savings but also to develop entrepreneurial consciousness through proper deployment of savings as seed capital to micro businesses that could lead to economic liberation. FDB’s financial inclusion programme Money $mart was introduced into the commercial studies curriculum in 2007 and Invest $mart programme followed in 2011. We also have plans of launching loan facilities later in the year that will be targeted towards financing retirees and vocational students.
FDB, ladies and gentlemen, has also been recognized internationally for its development role. We received a 20th century achievement award from ADFIAP (Association of Development Financing Institutions in Asia and Pacific) for our service to development financing. And that was only the start. I am proud to announce that FDB emerged as winner in the financial inclusion category for its submission in the 2017 ADFIAP “Outstanding Development Project Awards” Programme held in Macau this year
Ladies and gentlemen,
FDB has always promoted development. But the new Strategic Plan is envisioned to charter FDB on a course that is more relevant and innovative in addressing the diverse challenges of development in the 21st century. For this we need revised strategies to embrace the reality of the changing circumstances affecting development financing through challenges from mounting environmental, technological and social costs that threaten sustainability of development initiatives.
Under the new Plan, FDB will embrace itself to address risks emerging from adverse and competitive changes in the banking industry and from the adverse impacts of climate change, socio-economic and environmental degradation caused by previous development during the Industrial Revolution era.
The strategies crafted in our new plan is to strengthen FDB’s role as a direct contributor to creation of employment, promotion of women and youth entrepreneurship, and a community that is financially informed and empowered to sustain growth and development for future generations.
Further ladies and gentlemen,
The Sustainable Energy Financing Facility that was launched in 2010 has been established to align with the Government’s initiatives to reduce imports of fossil based fuels. From April 2014, FDB also started to include an Environmental Management Plan template as a requirement under its lending policy. This encourages our clients to invest in proper environmental management systems that facilitate the productivity of the agricultural/business system and contributes to project longevity, hence, giving the Bank continued business opportunities for the future.
I take this opportunity to congratulate the Hon. Prime Minister and his government for their global initiatives in combatting climate change.
Currently FDB is working towards obtaining Green Climate Fund [GCF] accreditation to access structured funding for feasible climate change adaptation projects. The GCF is a fund within the framework of the UNFCCC founded as a mechanism to assist developing countries in adaptation and mitigation practices to counter climate change. Once accreditation has been achieved, FDB will be able to on-lend and offer climate financing opportunities.
Moving forward, ladies and gentlemen, the vision for FDB in 2020 is that of a development bank that is strongly positioned as one that drives for changes that promote inclusive, green and sustainable development providing for innovative financing, business models that incorporate social and environmental safeguards in its lending policies, a facilitator that mobilizes funding for private and public sector engagement for development, capacity-building for small and medium enterprises that grow into large corporations that confidently infiltrate international markets and set high international standards in the global exporting arena.
And we are already on our way. The Board approved the Bank Realignment Scheme last year which has started to reflect on the enhanced portfolio quality and customer satisfaction, through improved service delivery. FDB was also quick to offer a Disaster Rehabilitation Package to hundreds of its customers who suffered potentially ruinous losses primarily from a single weather event: the most powerful and destructive cyclone recorded, T C Winston last year.
While we will continue to fine tune our internal short to medium term strategies and action plans that are more geared towards our internal processes such as re-alignment and re-engineering of the institution, long-term strategies have been developed on the strength of a stronger and a restructured FDB to ensure quality portfolio growth, prudent credit risk assessment, reduction in operational costs, industry best practice service delivery levels, product diversification and team empowerment.
Through such a strategic vision, FDB is envisioned to instutionalize itself as a leading regional and international development agency in the next 50 years that reflects principles of good governance, efficiency, gender equity, capacity development, promoting climate-solution and energy efficiency initiatives and partnerships across the public and private sectors that contribute towards achieving the global sustainable development goals.
With those words, I take this opportunity to acknowledge the dedication and commitment of the Executive Management, Staff and my fellow Board of Directors, and our partners, stakeholders, the Fijian Government and most importantly our clients for their continued support to FDB.
We will continue to serve you as your partner in progress.
Thank you, Vinaka and Dhanyavad.