Credit Guarantee for SMEs: review for Samoan government

Themes: Capacity Development | Economic Growth | Gender Equity | Governance | Private Sector Development | Social Development

Guinness Gallagher’s financial sector and legal experts worked as part of a consortia of advisors to undertake a review of the Small Business Loan Guarantee Scheme in Samoa undertaken by the Small Business Enterprise Centre (SBEC), an independent trust comprised of government and financial sector provider trustees.

SBEC was set up to help small businesses in Samoa to access finance and is funded by the government of New Zealand and the government of Samoa with close to US$4 million in guarantee funds. As part of its role, SBEC provides business training, business planning and financial advisory services and facilitated access to finance for small businesses in Samoa. At the time of the review SBEC had supported over 1,000 small businesses in Samoa across both rural and urban, created 2,500 job opportunities and contributed over US$4.8m a year to the Samoan economy.

Work undertaken by our team in reviewing the SME credit guarantee scheme involved reviewing the operations of the Small Business Loan Guarantee Scheme in Samoa, including a review of:-

  • The management and operation of the independent implementing agency - SBEC;
  • SBEC’s governance and establishing Trust Deed and representation from the Government agencies and commercial banks; and
  • The agreement between the Government agencies, as guarantor and the commercial banks as lenders under the scheme.

As a result our advisory team developed a:

  • New Trust Deed for SBEC to properly reflect the governance requirements for the organization and the involvement of the key stakeholders;
  • Revised representative membership format for the Trust;
  • Five year strategic plan for SBEC
  • Ongoing monitoring and evaluation framework for the credit guarantee scheme
  • Annual Plan reporting template
  • Modified Operational Policies and Procedures Manual (including improved Staff Salary Packages);
  • Human Resource Capacity Building Plan for SBEC; and
  • Revised and implemented Financial Management System.

The themes and sectors covered by this project were as follows: -

Theme Sub-Theme
Capacity Development - Client relations, network and partnership development
  - Institutional development
  - Organizational development
Economic Growth - Developing rural areas
  - Developing urban areas
  - Knowledge, science and technological capacities
  - Promoting economic efficiency and enabling business environment
  - Promoting macroeconomic stability
  - Widening access to markets and economic activities
Gender Equity - Gender equity in (human) capabilities
  - Gender equity in (economic) opportunities
Governance - Economic and financial governance
Private Sector Development - Policy reforms
  - Private sector investment
  - Public Private Partnership
Social Development - Human development
  - Indigenous people
Sector Sub-Sector
Agriculture, natural resources, rural development - Agriculture policy, institutional and capacity development
  - Agricultural production
  - Agro-industries marketing and trade
Education - Education sector development
  - Technical and vocational education and training
  - Tertiary
Finance - Financial sector development
  - Inclusive finance
  - Smal and medium enterprises financing and leasing