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What is the Need and Extent of Poverty in Solomon Islands?
Solomon Islands ranked low at 156 out of 187 countries in the 2013 Human Development Index (HDI) and has always been among the lowest ranked in the region. Solomon Islands’ per capita GDP is USD 2,024, placing it on the United Nations’ Least Developed Country list. 22.7% of the population of the Solomon Islands lives below the Basic Needs Poverty Line (BNPL). In terms of number of households, there are about 17,500 households living below the BNPL and 3,700 households living just above the BNPL. The country formerly relied on a robust timber industry as a source of economic activity. However, unsustainable logging practices, coupled with falling prices in the late nineties drove the industry out of business. Today, more than 75 percent of the labor force is engaged in subsistence farming and fishing , and the main exports are copra (dried coconut meat) and palm oil. Internal economic activity is significantly complemented by a high degree of foreign assistance. In addition to technical and physical support, according to the World Bank, the country receives roughly 40% of its gross national income in official development aid.
SPBD Microfinance Ltd (Solomon Islands)
South Pacific Business Development Microfinance (Solomon Islands) Ltd. was incorporated on 13 April 2012 as a private company under the Companies Act 2009. It is the fourth entity in the SPBD network of microfinance institutions in the South Pacific region following SPBD Samoa (2000), SPBD Tonga (2009) and SPBD Fiji (2010). SPBD SI started setting up operations in November 2012 and disbursed its first loans in January 2013. As of 31 March 2016, US$4,451,330 and 9,102 loans have been disbursed since inception with 5,280 savings accounts and over US$455,000 of savings. Its offices are located in the BSP Building, in the capital Honiara. Despite the challenges presented by the Solomon Islands, many important characteristics support SPBD’s entry into and success in this new market. There is a clear demand for microloans and a lack of supply of microcredit financial access providers. SPBD’s potential clients lack financial literacy and awareness relative to their Samoa and Tonga counterparts, but the recommended training programs will address this deficiency.
About Solomon Islands:
Solomon Islands consists of more than one thousand small islands in the southwest Pacific Ocean, approximately 1,200 miles northeast of Australia, and east of Papua New Guinea. It is 11,000 square miles large (roughly equivalent to the size of Hawaii), and home to around 523,000 people. The capital, Honiara, is located on the island of Guadalcanal. The country is divided into 10 administrative areas, which are comprised of nine provinces and the town of Honiara. The United Kingdom declared a Solomon Islands a protectorate in 1900, paving the way for missionaries to enter the country and convert the majority of people to Christianity (currently 97 percent of the population is Christian). As a result of being deemed a protectorate, rather than a colony, Solomon Islands significantly lagged in development.
There are three banks in Solomon Islands: Australia New Zealand (ANZ), Westpac and Bank South Pacific (BSP). ANZ and Westpac are headquartered in Australia while BSP is headquartered in Papua New Guinea. Honiara serves as the Solomon Islands headquarters for all three banks.