Consultation on the Access to Capital Bill to regulate new financing and alternatives for raising capital for micro, small and medium enterprises will begin next Thursday.
This has been highlighted by the Acting Prime Minister and Minister for Trade Manoa Kamikamica during a press conference today who says access to finance has been a challenge for MSMEs despite incentives being offered by the government.
He says this is due to the high cost of borrowing which makes it unviable and difficult for MSMEs to access finance.
Kamikamica says currently funding through commercial banks does not offer MSME’s friendly or tailored products and services such as lower interest rates, collateral-free and unsecured loans.
The Minister says through this Bill, they will propose new forms of raising capital which is either through equity or debt.
He says three regimes under the proposed Bill include Small Offers which enable companies to raise funds through a limited number of investors without the costly and onerous disclosure obligations targeting families, friends and those familiar with the business such as the customers, suppliers, and soft business network.
The Minister further says under Equity Crowdfunding large groups of people contribute money towards a campaign to fund a project or business in return for rewards while in Peer to Peer, Lending entities raise funds through debts which is facilitated through a licensed immediacy when leaders or individuals are willing to lend their funds to business and earn interest when loans are repaid.
Kamikamica says this will address challenges and embrace opportunities that lie ahead, stimulate private sector investment and innovation, raise funds in a regulated and protected manner and provide financing to businesses in Fiji.
The draft legislation will be carried out by a working group including the Ministry of Trade Co-operatives Small Medium Enterprises and Communications, the Ministry of Finance, the Reserve Bank of Fiji, the Office of the Solicitor – General and the Asian Development Bank.
