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South Pacific Business Development (SPBD) improves conditions for families living in poverty by providing accessible credit, training, and guidance to help them start, grow and maintain micro-businesses, build assets, finance home improvements, and afford to educate their children.
SPBD’s vision is to create a network of micro-enterprise development organizations in the South Pacific and neighboring regions to empower women through financial access and economic development, and to help them lift themselves and their families permanently out of poverty.
SPBD serves women living in both rural and peri-urban areas who are vulnerable to poverty. They include single mothers, the unemployed, minorities, the disabled, the unbanked, and victims of domestic violence. Of the total number of loans distributed:
- 99% go to women
- 80% go to clients living in rural areas
- 40% go to single mothers
Financial Literacy Program
SPBD complements its financial product offerings with financial literacy training and weekly access to business training support. SPBD’s Financial Literacy Program teaches women financial management best practices to assess how their business is performing and to maximize their profits. This, in turn, leaves more money available to invest in their children’s education, upgrading housing conditions, and saving for the future.
SPBD follows the Grameen Bank model of microfinance. Poor people in Samoa face “poverty of opportunity” because there are few formal employment openings available in the country. For most rural Samoans, jobs simply don’t exist.
To reach these people, SPBD has women in rural villages self-select groups of four to seven to receive loans. In each village, there is usually two to five SPBD groups. The members of these peer groups support and guarantee one another. They approve one another’s business plans and loan applications. They also act as weekly guarantors on all loan repayments, and motivate each other to succeed. For example, if a client falls ill, her group will help with her business until she recovers. If a client gets discouraged, the support group will pull her through. This contributes substantially to the extremely high repayment rate on loans made to microfinance groups.
SPBD has weekly meetings in local villages with all of its clients. At these meetings, all SPBD-related business takes place, including business training modules, review of business plans, loan applications and approvals, weekly loan repayments, savings deposits, and ongoing mentoring and coaching.
SPBD provides small, unsecured loans of around US$400 to groups of rural women who invest in businesses based on their existing skills. They are given training, ongoing guidance and motivation to help them grow small income-generating endeavors so that they can work their way out of poverty. This is a very structured program with clear rules.
From their second loan onwards, members are encouraged to invest the proceeds of their loans in basic housing improvements and child education. SPBD helps to ensure that the children of all of its members receive a proper education by providing financing to pay for school fees, school uniforms and textbooks.
SPBD works to improve household wellbeing by providing financing for basic housing improvements, like accessing electricity, running piped water, installing proper sanitation, building a secure foundation (instead of a dirt floor), and replacing grass roofs with more durable and resilient tin.
It’s expensive and difficult for the poor to open bank accounts at traditional commercial banks. SPBD helps members save for a rainy day and develop good financial habits by providing a basic savings service. By saving with SPBD, members have a safe and convenient place to make small and regular savings deposits.
SPBD also offers a loan and life insurance product to all of its members. In the event of a member’s death, her family receives financial assistance. This assurance of no hardship for the remaining family is something that many members greatly value.
Started in January of 2000, SPBD Samoa is SPBD’s first location and is its largest operation. SPBD operates in every village in the country. Since its inception, the organization has made microfinance loans to over 40,000 women totaling 55 million Samoan Tala (US$23.9 million).
A Note on SPBD Samoa's Portfolio Yield:
We care deeply about the cost that Kiva borrowers pay for their loans, which is why fair pricing is a core part of our initial due diligence process for Field Partners. With Kiva's 0% capital, many of our Field Partners are also able to add additional value to their loans by reducing interest rates, offering non-financial services or creating new loan products.
For partners with reported portfolio yields or average APRs higher than 50%, Kiva takes steps to check that the high rates are justified by the impact of the loans. Kiva also verifies that the partner is not generating unreasonable profits or paying inflated salaries, and that the partner’s elevated operating costs are justified by its operating environment and/or the design of its loan products.
We seek to support loans that don’t impose an unjustifiable cost burden on hard-working borrowers. We nevertheless recognize that in order to reach vulnerable and excluded people with high-impact products and services, some of our partners incur high costs that necessitate charging higher-than-average costs to borrowers in order to allow for sustainability and scale.
Factors that drive up the costs that this partner organization charges its borrowers include:
- They provide more than just cash to many of their borrowers, including costly wraparound services such as healthcare, financial or business training, agricultural extension services, insurance or access to education.
- They work extensively in rural areas, which requires their employees to engage in costly travel to find and serve their clients.
- They operate in a region known to be at risk of natural disaster, which increases the cost of doing business.
- They operate in an area with a limited or poorly functioning banking system. This makes it difficult to access funding locally, and makes it more challenging to send and receive payments on loans from outside the country.
Repayment Performance on Kiva
|This Field Partner||All Kiva Partners|
|Start Date On Kiva||Jul 31, 2006||Oct 12, 2005|
|Amount of raised Inactive loans||$0||$601,750|
|Number of raised Inactive loans||0||272|
|Amount of Paying Back Loans||$1,559,625||$140,273,000|
|Number of Paying Back Loans||1,993||170,752|
|Amount of Ended Loans||$7,581,175||$783,116,050|
|Number of Ended Loans||11,377||979,916|
|Amount in Arrears||$5,246||$7,571,207|
|Number of Loans Delinquent||39||20,235|
|Amount of Ended Loans Defaulted||$15,969||$10,717,799|
|Number of Ended Loans Defaulted||51||30,602|
|Currency Exchange Loss Rate||0.02%||0.46%|
|Amount of Currency Exchange Loss||$1,598||$4,210,314|
|Amount of Refunded Loans||$40,175||$5,840,725|
|Number of Refunded Loans||50||5,906|
Loan Characteristics On Kiva
|This Field Partner||All Kiva Partners|
|Loans to Women Borrowers||99.63%||75.10%|
|Average Loan Size||$660||$403|
|Average Individual Loan Size||$677||$635|
|Average Group Loan Size||$1,739||$1,782|
|Average number of borrowers per group||6.2||7.8|
|Average GDP per capita (PPP) in local country||$5,200||$5,908|
|Average Loan Size / GDP per capita (PPP)||12.69%||6.81%|
|Average Time to Fund a Loan||7.22 days||6.97 days|
|Average Dollars Raised Per Day Per Loan||$91.44||$57.80|
|Average Loan Term||12.5 months||11.1 months|
Journaling Performance on Kiva
|This Field Partner||All Kiva Partners|
|Average Number of Comments Per Journal||0.14||0.05|
|Average Number of Recommendations Per Journal||10.34||1.21|
Borrowing Cost Comparison (based on 2014 data)
|This Field Partner||Median for MFI's in Country||All Kiva Partners|
|Average Cost to Borrower||53% PY||51.00% PY||26.15% PY|
|Profitability (return on assets)||3.1%||-12.9%||-0.05%|
|Average Loan Size (% of per capita income)||10.60%||11.00%||17.77%|
Country Fast Facts
- Official Language:
- Samoan (Polynesian) (official), English
- Avg Annual Income:
- Labor Force:
- agriculture: 65%, industry: NA%, services: NA%
- Population Below Poverty Line:
- Literacy Rate:
- Infant Mortality Rate (per 1000):
- 20.5 deaths
- Life Expectancy:
- 83.32 years
Field Partner StaffVaiosina Ainuu