Tonga Development Bank (TDB) has been tasked by the country’s Ministry of Finance to implement the project, ‘ADB-JFPR Microfinance Revolving Fund’, funded by the Asian Development Bank (ADB) under the Japan Fund for Poverty Reduction (JFPR) Grant Assistance Project 9151 or the ‘Social Protection of the Vulnerable in the Pacific’ project.
The project, with ADB allocation of USD280,000, aims at empowering the vulnerable communities in Tonga. The Fund supports income generating activities, especially in helping women to become better entrepreneurs for income generation and welfare improvement.
The Fund specifically targets assistance towards unemployed women, widows, and single mothers, aged 18-64. However, men can also be included but the total approval under the Fund should be 80% to women. 50% of the Fund is being allocated for the outer islands and the remaining 50% is allocated for the rural villages in Tongapatu. Key areas of lending to women include: handicraft, manufacturing of imports-substitution products, agriculture, tourism, and income-generating activities (on a case to case basis).
As at the end of September 2015, a total of 373 clients have already received assistance under the Fund. About 70% of the total approval were women, and the highest number of loan approval were for handicrafts.
For the business support component, TDB has been organizing an annual two-day event “Holiday Market Festival”, held every December when the demand for buying gifts for Christmas season and peak period for overseas Tongans holidaying in Tonga who wish to take back traditional handicraft with them. The main purpose of this festival is to bring ADB clients together (especially those from the outer islands and rural areas) so that they can showcase, market their products and exchange ideas on how they can improved their products and businesses. For the last two years, this event has been very successful and is perceived to continue its success in the coming years.
The ‘ADB-JFPR Microfinance Revolving Fund’ project was a recipient of the Merit Award in the 2016 ADFIAP Outstanding Development Project under the Financial Inclusion Category.