1. When international investors or visitors come to Fiji, what role does the country's financial system play in supporting that activity?
When international investors and visitors come to Fiji, the country’s natural beauty and the warmth of its people are undoubtedly important. But beneath the experience of tourism and investment lies something equally fundamental: a financial system that allows money to move reliably, safely and efficiently.
For Fiji, this financial infrastructure is a critical part of the economy’s ability to connect with the rest of the world.
A strong and internationally connected financial system Fiji has a diverse banking sector comprising six commercial banks, including major Australian institutions, BRED Bank from France, a bank from India, a Papua New Guinea-based bank listed in Australia, and a locally owned bank. This combination of international and domestic institutions provides businesses, investors and individuals with access to sophisticated financial services.
For investors, this means that bringing money into Fiji, making payments or repatriating funds can be undertaken through a financial system that operates to standards familiar in larger and more developed economies.
“You can have the most beautiful sea and the most welcoming people, but ultimately there has to be a reliable flow of money,” says Governor of the Reserve Bank of Fiji, Mr. Ariff Ali. “Whether that money is digital, electronic or physical, you need a stable, strong and robust financial system to support it.”
That, to me, is the first important point.
2. How does the Reserve Bank ensure that Fiji's banks meet international standards?
Fiji has a diverse banking sector comprising six commercial banks, including major Australian institutions, BRED Bank from France, a bank from India, a Papua New Guinea-based bank listed in Australia, and a locally owned bank.
This combination of international and domestic institutions provides businesses, investors and households with access to sophisticated financial services. For an investor, this international connectivity matters as a person investing in Fiji should be able to access financial services that are familiar in larger and more developed economies. Money should be able to move into the country, transactions should be settled efficiently, and funds should be able to move across borders within a robust regulatory framework.
The Reserve Bank of Fiji has an important role in maintaining that confidence.
Our banking institutions operate within internationally recognised principles and standards, including the Basel framework. This provides a level of familiarity for international investors and reinforces confidence in the integrity of our financial system. In a small economy, that confidence is particularly important.
The fact that Fiji's banking system operates according to international standards gives investors’ confidence and familiarity when they enter our market.
3. What are the main strengths of Fiji's financial sector from an investor's perspective?
Apart from a number of reputable international brand names, the bottom line is that our financial system is extremely strong.
The purpose of a sound financial system is not simply to prevent instability. It is to create an environment in which businesses and households can make decisions with confidence.
Fiji’s banking sector currently benefits from competitive lending rates and relatively low levels of non-performing loans. Average lending rates are around 5.5 percent, with some larger corporates accessing rates between 3.0 percent and 3.5 percent. Non-performing loans are around 3 percent or slightly above, reflecting sound credit assessment, capital positions and credit-risk management.
For a developing economy, the cost and availability of finance matter enormously.
Businesses need affordable financing to invest, expand capacity, adopt new technology and create employment. Investors need confidence that the financial system is capable of supporting their activities through the economic cycle.
This is why maintaining monetary and financial stability remains central to the Reserve Bank’s responsibilities. Stability provides the platform on which investment and growth can take place.
4. Fiji is part of a region where correspondent banking can be a significant challenge. How does Fiji compare with other Pacific Island economies?
As a small, open economy, Fiji depends heavily on its connections with the global financial system.
Correspondent banking relationships are essential for international transactions, particularly those involving major currencies such as the US dollar. Many small economies face challenges in maintaining these relationships. Fiji has, however, been able to preserve its correspondent banking connections.
This reflects the importance of maintaining an effective legal and regulatory framework, particularly in relation to anti-money-laundering requirements, while preserving the confidence of international financial institutions.
Our objective must be clear: Fiji must remain internationally connected while maintaining the integrity, safety and resilience of its financial system.
The presence of international banks in Fiji also helps considerably.
5. Where do you see opportunities for investors within Fiji's economy?
The stability of the Fiji dollar is another important consideration for investors. The currency is managed against a basket comprising the US dollar, New Zealand dollar, Australian dollar, Japanese yen and euro, with the US dollar carrying the largest weighting. Exchange-rate stability provides investors with greater confidence when bringing capital into Fiji and when eventually repatriating their investments.
Interest rates are obviously very important. You do not want to invest in a country where financing costs are excessively high.
While tourism remains central to Fiji’s economy, the country’s investment opportunities extend well beyond the traditional sectors.
One area of opportunity is import-substitution. Fiji imports considerably more than it export, creating scope for businesses to establish local production of goods that are currently imported. Investors can also identify opportunities to provide products and services more efficiently and competitively within the domestic market. This presents an opportunity to strengthen domestic productive capacity while reducing reliance on imported goods.
Renewable energy is another area with considerable potential. Lower-cost financing for businesses investing in renewable energy could help reduce operating costs while simultaneously strengthening Fiji’s long-term resilience and energy security.
There is significant potential for businesses that can produce locally, substitute imports and improve the competitiveness of the domestic market.
6. You recently launched an innovation hub. What opportunities do you see in FinTech and digital services?
Technology is opening an entirely new dimension of opportunity for Fiji and therefore geography should no longer define our economic possibilities.
The Reserve Bank’s innovation initiatives are intended to encourage organizations, both local and international, to work with Fiji in the FinTech space. With relatively high digital and internet penetration, Fiji has the potential to participate more actively in the global digital economy.
7. Is that digital infrastructure also creating opportunities beyond FinTech?
The experience of COVID-19 demonstrated that many professional services can be delivered remotely. This creates possibilities for Fiji to attract international workers and businesses through initiatives such as a potential “work-from-Fiji” model, supported by reliable connectivity, an English-speaking population and a time zone that can work reasonably well with North American markets.
The digital opportunity extends beyond financial technology. Fiji’s business process outsourcing sector has expanded, with local companies providing services ranging from accounting and insurance claims processing to airline bookings and research services.
For international companies, Fiji offers the combination of an English-speaking workforce, digital connectivity and relatively competitive labor costs and Government incentives. These advantages could allow the country to develop a broader range of internationally traded digital and professional services.
The opportunity is therefore not simply to digitize Fiji’s existing economy, but to use digital technology to create new sources of economic activity. We recently launched an innovation hub, and with high digital and internet penetration, we are looking for organizations, particularly local organizations, but also international companies, that can come and work with us in the FinTech space and help move Fiji forward.
California, for example, is full of FinTech companies and technology businesses. Twenty years ago, you had to be physically located in Silicon Valley to participate in many of these activities. “Today, technology means you can be sitting on an island in the Pacific and still participate in the global digital economy,” Governor Ali says.
8. How important is the stability of the Fiji dollar for investors?
The exchange rate is another important part of the investment equation. A stable currency supports investor confidence. For investors, exchange-rate stability reduces uncertainty.
The Fiji dollar is managed against a basket of five currencies: the US dollar, New Zealand dollar, Australian dollar, Japanese yen and euro; with the US dollar carrying the largest weighting.
When capital comes into Fiji, investors need confidence that the value of their investment will not be subject to unnecessary volatility. The same consideration applies when returns are eventually repatriated.
9. How important is the US market and US dollar to Fiji?
The US dollar is extremely important to Fiji. This is particularly important for Fiji because international trade is heavily dependent on foreign currencies. A significant proportion of trade is conducted in US dollars, including payments for essential imports such as fuel. Foreign exchange earnings are therefore fundamental to our ability to meet international obligations.
When we receive foreign currency, we invest a significant portion of it in US Treasury securities and US banks. This is something many people do not necessarily realize.
Small countries need foreign currency because international trade often cannot be conducted in their own currencies. We need US dollars or euros to pay for imports.
This is why US visitors are so important to Fiji. They bring foreign currency into the country, which ultimately helps us meet international payments for essential imports such as fuel and medicine.
10. What message would you give to the American market about Fiji?
I think what we really want to tell people is that Fiji is more than Fiji Water.
To me, Fiji is fundamentally about its people. That is one of the reasons why we do so well in tourism.
Every time I fly from Los Angeles or San Francisco to Fiji, I see the difference in the way people respond when they arrive. As soon as they experience the warmth of Fijian hospitality - even in the way our flight attendants speak to them, you can see how people begin to relax.
That hospitality is what makes Fiji different.
Fijian hospitality is one of the characteristics that differentiates Fiji from other destinations. It is an important reason why visitors return and why tourism remains such a successful part of our economy.
From time to time, we need to treat ourselves as well. We need to pamper ourselves, and there is perhaps no better place to do that than Fiji.
The other important point is value for money. The US dollar is worth more than twice the Fiji dollar, so visitors from the United States can enjoy very good value when they come here.
You also have direct connectivity. There are daily flights from Los Angeles to Fiji, as well as flights connecting Fiji with San Francisco and other major US destinations.
The United States is our third-largest source of tourists, and direct air connectivity makes it easier for Americans to visit.
The fact that Fiji is English-speaking is another advantage. American visitors can arrive and communicate easily with people throughout the country.
11. What do you believe ultimately differentiates Fiji from other destinations in the Pacific and Asia?
You go to hotels all over the world, and in many places it is simply business as usual. People say good morning and carry on with their work.
In Fiji, I believe the warmth is more genuine.
What makes Fiji different is its people. The hospitality comes from the heart.
That is a very important part of our competitive advantage.
12. Fiji is particularly exposed to climate change and natural disasters. What is the Reserve Bank doing to strengthen financial resilience?
The whole world is now at the forefront of climate change. For Fiji, climate change is not a distant risk.
Cyclones, flooding and other natural disasters can affect households, businesses, infrastructure, government finances and the financial system itself. Financial resilience must therefore form part of our broader climate-resilience agenda.
Fiji has already taken important steps. We were among the early developing countries to issue a green bond, and we have also issued a blue bond. We were also among the first developing countries to issue a green bond, which was listed on the London Stock Exchange. Fiji chaired COP23 together with Germany in Bonn.
The Reserve Bank has worked with the International Finance Corporation to develop a green taxonomy to help guide lending towards climate-related investments. But the work cannot stop there.
We need to continue developing financial instruments and incentives that mobilise private capital towards renewable energy, resilient infrastructure and other investments that reduce Fiji’s exposure to climate-related shocks.
Climate resilience is economic resilience. And economic resilience is an essential component of financial stability.
In addition, as a central bank, we have other initiatives such as concessionary funding targeted towards supporting import substitution and businesses in increasing exports from Fiji. One area we are examining is how to provide lower-cost financing for businesses investing in renewable energy.
Energy security is critical. If businesses can access lower-cost financing to invest in renewable energy, they can reduce their operating costs while contributing to Fiji's long-term resilience.
13. What role do micro, small and medium-sized businesses play in Fiji's economic development?
MSMEs can become a stronger engine of growth and have enormous potential in Fiji. They are often closest to local communities, create employment and can respond quickly to emerging market opportunities. But many face constraints in accessing finance, markets, technology and business capability.
The Reserve Bank is working with Government and other partners to explore mechanisms such as credit guarantee schemes, mentorship and digital platforms to help smaller businesses grow.
Financial innovation can also help businesses manage risk. Micro-parametric insurance is one example. Rather than requiring a conventional assessment of physical damage, payouts can be triggered by measurable events such as specified levels of rainfall or wind speed. This can enable affected businesses to receive assistance more quickly following a disaster. Around 8,500 small businesses have been onboarded into the programme, well above the original target of 3,500.
For a small business, timely access to even a relatively modest amount of finance following a disaster can determine whether it survives, reopens and continues to employ people.
Building the resilience of MSMEs is therefore part of building the resilience of Fiji’s economy.
Micro and small businesses have enormous potential in a country like Fiji.
For a small business, receiving a few hundred dollars quickly after a disaster can make the difference between reopening and remaining closed.
14. How is digital finance changing financial inclusion in Fiji?
One of the most encouraging developments in Fiji’s financial sector is the rapid growth of digital financial services.
The Reserve Bank’s Financial Services Demand Survey shows a significant increase in financial inclusion. More people are accessing financial services through mobile wallets, even where they may not have a traditional bank account. This is particularly important in rural Fiji, where physical banking infrastructure can be limited.
The proportion of people using these services has increased from around 17 percent in 2014 to approximately 67 percent today. We are also seeing more women in rural areas accessing financial services through mobile wallets.
This illustrates an important principle for financial-sector development:
Innovation is valuable when it solves real problems for people.
For a person living in a rural community, a mobile wallet can reduce the distance between them and the financial system. It can provide a safer and more convenient way to hold money, make payments and receive funds.
For us as a central bank, data is extremely important. You make better decisions when you have better data.
15. How significant are mobile wallets for remittances from Fijians living overseas?
Remittances are becoming part of the digital economy. The transformation is particularly visible in remittances.
Personal remittances have become Fiji’s second-largest source of foreign exchange after tourism. Around half of remittances now come directly through mobile wallets, compared with negligible levels before COVID-19.
The reason is straightforward: convenience and cost.
A recipient can receive money directly into a mobile wallet and use it at a supermarket or other business without necessarily having to travel to a bank.
This is financial inclusion in practical terms.
It is about ensuring that the benefits of financial innovation reach households, communities and businesses, not simply financial institutions.
Mobile wallets have grown exponentially in Fiji, making financial services more accessible, convenient and affordable.
16. If you had to summarise the message you want international investors and businesses to understand about Fiji, what would it be?
I think it is important to understand how the financial system connects with every other part of the economy.
You want to establish yourself in a country with a strong banking system, a stable currency, competitive interest rates, international financial connections, English-speaking people and reliable digital infrastructure.
Fiji has those characteristics.
At the same time, we have opportunities in areas such as import substitution, renewable energy, FinTech, business process outsourcing, tourism and small business development.
e financial system is not an isolated part of the economy. It is what allows investors, businesses, tourists and communities to participate in the wider economic ecosystem.
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