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What is the Need and Extent of Poverty in Samoa?
According to the UN, Samoa is one of the world’s least developed countries (LDC). This puts it in the same category with most African nations, and countries such as Bangladesh, India, and Haiti. According to a UNDP study, 25% of all Samoan families live below the poverty line of US$2 per day. Nearly all of SPBD members join the program while living on less than US$2.50 per day.
SPBD Microfinance (Samoa) Ltd., a Grameen Bank replication, was founded by Gregory F. Casagrande in January 2000. As the initial and flagship microfinance institution of the SPBD Network, it is often used to launch new products and pilot schemes. We work on all 4 islands and nearly every village in Samoa and have been financially sustainable since 2007. SPBD subscribes to the Sustainable Development Goals, which set the critical challenge of halving absolute poverty in the world by 2030. We strive to do our part in Samoa first and subsequently throughout the South Pacific. SPBD and its staff adhere to a set of core values that include: excellent service, creative products, strong leadership, financial sustainability, financial prudence, integrity, respect and responsibility. SPBD is currently impacting over 20,000 families (120,000 individuals) equaling 60% of the population.
Samoa has been an independent nation since 1962 and is governed by an elected parliament. Samoa is considered the cultural heart of Polynesia. Both English and Samoan are official languages. A traditional local ‘matai’ (chiefdom-based) system overlooking village affairs operates in parallel to the formal legal system. Household economics are profoundly shaped by cultural norms, village authority structures, and the church. Land ownership is customarily held in the name of the village chief and exploited communally.
School is compulsory until age 14 and about 95 per cent of children attend, although that number drops to 25 per cent after the age of 14. Samoa is predominantly rural, with over 80% of its 196,000 inhabitants living in one of the two main islands, Upolu and Savaii. There are few major employers providing traditional waged employment with only 24,000 people having formal full time employment. In addition, there is mass migration of the brightest to New Zealand, Australia and the USA to pursue better opportunities. The economy of Samoa has traditionally been dependent on development aid, family remittances from overseas, agriculture, and fishing. The country is vulnerable to devastating storms. Agriculture employs two-thirds of the labor force and furnishes 90% of exports, featuring coconut cream, coconut oil, and copra. Tourism is an expanding sector accounting for 25% of GDP; over 120,000 tourists visited the islands in 2015.
Underdevelopment of the financial markets has been identified as a binding constraint to private sector development. Despite the presence of four commercial banks (ANZ Bank, Westpac Bank, National Bank of Samoa, and the Commercial Bank of Samoa), and several non-bank financial providers (such as the Development Bank of Samoa, the National Provident Fund, and SPBD Samoa) the country still ranked 96th out of 189 economies for ease of getting credit for business (ranking from the best to the worst) in Doing Business 2016 (www.doingbusiness.org).
*Planet Ratings (A Global Microfinance Rating Agency) conducted a Smart GIRAFE Rating for SPBD Samoa. The ‘Planet Rating’ rating committee has granted SPBD Samoa the good investment grade of “B” with a “Positive” trend. The asset quality is rated “A”. As you can see in the certificate attached, the Smart GIRAFE rating of SPBD Samoa ranks in the first quartile when compared to all MFIs rated by Planet Rating since 2008. This is deemed a very good performance by Planet Rating. The rating report is available through the Planet Rating website.