SPBD SI (South Pacific Business Development, Solomon Islands) opened in 2012 and is part of a larger SPBD network offering microfinance services across the Pacific region. The Solomon Islands is one of the poorest countries in the South Pacific. One third of the population of Honiara, the capital city, lives below the poverty line.
 
Microfinance services in the Solomon Islands are almost non-existent. SPBD SI is the only sustainable institution offering comprehensive microfinance services in the country. The organization provides critical financial assistance to numerous financially excluded populations.
 
Kiva funding will be used to help SPBD SI expand its services in a largely underserved microfinance market. Kiva’s goal is to help SPBD SI scale and provide loans to more clients.
 
A unique lending approach:
 
SPBD SI uses a group lending strategy to provide working capital to women and help them develop small businesses. SPBD SI targets low-income women who are either unemployed or are engaged in informal business activities. The main economic sectors women participate in are agriculture, fishing, livestock farming, transport, beauty salons, retail stores, sewing, handicraft production and food. The organization also offers loans to women to pay for home improvements and children’s school expenses.
 
In addition to loans, SPBD SI offers other financial and non-financial services including voluntary savings plans, payment protection insurance, life micro-insurance, financial literacy and business training.

A note about SPBD Solomon Islands' 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’re based in an area with a high cost of living and doing business. This is oftendue to the high demand and low supply of adequate housing and goods.

  • They provide very small loans. This leads to higher operating costs, since providing each individual loan presents a minimum per-unit cost.

  • They work in areas with very poor infrastructure, such as limited roads. This increases the costs of finding clients and maintaining branch offices.

  • They pay high interest rates on the loans they take from banks and other funders, given the market in which they operate. This means they need more support from innovative sources like Kiva to reduce costs and pass savings on to borrowers.

  • They’re a small company or organization that hasn’t yet achieved the scale and efficiency necessary to reach sustainability and reduce pricing, but the impact of their services merits the opportunity to prove their business model.

  • 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 Nov 11, 2014 Oct 12, 2005
Total Loans $169,675 $863,833,075
Amount of raised Inactive loans $0 $389,950
Number of raised Inactive loans 0 242
Amount of Paying Back Loans $82,200 $136,676,100
Number of Paying Back Loans 78 165,975
Amount of Ended Loans $87,475 $726,767,025
Number of Ended Loans 116 902,827
Delinquency Rate 0.25% 8.24%
Amount in Arrears $117 $7,300,766
Outstanding Portfolio $46,917 $88,598,068
Number of Loans Delinquent 4 22,298
Default Rate 0.00% 1.32%
Amount of Ended Loans Defaulted $0 $9,621,719
Amount of Ended Loans $87,475 $726,767,025
Number of Ended Loans Defaulted 0 26,679
Currency Exchange Loss Rate 0.00% 0.43%
Amount of Currency Exchange Loss $2 $3,748,457
Refund Rate 0.00% 0.64%
Amount of Refunded Loans $0 $5,544,100
Number of Refunded Loans 0 5,818

Loan Characteristics On Kiva

    This Field Partner All Kiva Partners
  Loans to Women Borrowers 100.00% 74.85%
Average Loan Size $875 $408
Average Individual Loan Size $875 $641
Average Group Loan Size $0 $1,805
Average number of borrowers per group 0 7.8
Average GDP per capita (PPP) in local country $1,800 $5,937
Average Loan Size / GDP per capita (PPP) 48.59% 6.86%
Average Time to Fund a Loan 0.18 days 6.9 days
Average Dollars Raised Per Day Per Loan $4,978.35 $59.06
  Average Loan Term 11.07 months 11.04 months

Journaling Performance on Kiva

    This Field Partner All Kiva Partners
  Total Journals 43 438,820
  Journaling Rate 31.62% 41.47%
  Average Number of Comments Per Journal 0.00 0.05
  Average Number of Recommendations Per Journal 0.00 1.29

Borrowing Cost Comparison (based on 2013 data)

    This Field Partner Median for MFI's in Country All Kiva Partners
  Average Cost to Borrower 42% PY N/A 27.39% PY
  Profitability (return on assets) N/A N/A -0.64%
  Average Loan Size (% of per capita income) N/A N/A 19.18%

Country Fast Facts

Field Partner Staff

Rajii William Mona
Ronald Vikash Prasad