Solomon Islands Joins Regional Push to Secure Global Financial Access

The country will also participate in a comprehensive feasibility study exploring the development of a Pacific Payments Mechanism.

In a landmark move to safeguard its international financial connectivity, the Solomon Islands has joined a World Bank-led regional initiative aimed at strengthening correspondent banking relationships across the Pacific. The initiative will help the country mitigate the risks of financial disconnection, bolster trade and remittance flows, and enhance the long-term stability of its financial infrastructure.

The regional project, launched in August 2024, is already operational and includes other Pacific nations such as Fiji, Kiribati, the Republic of the Marshall Islands, Samoa, Tonga, Tuvalu, and Vanuatu, with the Pacific Islands Forum Secretariat serving as the implementing agency. Funded through the World Bank’s International Development Association (IDA) and supported by several international partners, the program offers a combination of emergency banking support and systemic reforms.

The Risks of Financial Isolation

Over the past decade, the Solomon Islands has experienced a 57% reduction in correspondent banking services — key international partnerships that allow the country to send and receive foreign currency transactions. This trend has raised alarms over potential financial isolation, which could impair international trade, disrupt remittances, and undermine disaster response capabilities.

“For Solomon Islands, this project is about more than banking—it’s about ensuring our people, businesses, and government can remain connected to the global economy,” said Harry Kuma, the country's Minister of Finance and Treasury.

The loss of correspondent banking ties disproportionately affects low-income families relying on remittances, small exporters, and public institutions that depend on efficient cross-border transactions for essential services and supplies.

Project Goals and Benefits

By joining this World Bank-supported program, the Solomon Islands gains access to a dual strategy:

1. Short-term Safeguards: A standby facility for temporary correspondent banking services in the event of access loss.

2. Long-term Capacity Building: Technical assistance and institutional support to improve compliance with international standards, enhance payment systems, and modernize financial oversight mechanisms.

The country will also participate in a comprehensive feasibility study exploring the development of a Pacific Payments Mechanism. This innovative system is intended to reduce costs, improve reliability, and streamline cross-border financial transactions — delivering secure, inclusive financial access across the region.

Economic Impact: Trade and Remittances

The initiative comes at a critical time for the Solomon Islands, where remittances now constitute over 5% of GDP. This share is expected to rise further due to growing labour mobility programs in Australia and New Zealand. Efficient cross-border payment systems are essential for ensuring that remittance flows remain affordable and accessible to rural communities.

Additionally, the government is seeking to expand agricultural exports, and improved financial connectivity will be pivotal in facilitating trade finance, reducing transaction delays, and boosting market confidence.

“Whether it's families receiving remittances, exporters accessing trade finance, or agencies coordinating disaster relief, secure financial access is fundamental,” Minister Kuma emphasized.

Pacific-Led, Globally Supported

The regional initiative exemplifies Pacific collaboration and has received strong backing from Australia and New Zealand through the PNG and Pacific Islands Umbrella Facility, as well as from Japan, the UK, and the US via the CBR Multi Donor Trust Fund.

“This project is a truly Pacific solution to a shared challenge,” said Baron Waqa, Secretary General of the Pacific Islands Forum Secretariat. “It’s now even stronger with Solomon Islands on board.”

World Bank Support and Future Outlook

Under the additional financing agreement, the Solomon Islands will receive US$9 million, split equally between grants and low-interest credits. This funding will be used to:

• Strengthen regulatory frameworks for banking and payments

• Improve oversight of payment systems

• Collect financial access data, including gender-disaggregated information, to support inclusive financial policy development

“This expansion and achievement of effectiveness is a significant milestone for the Pacific CBR project,” said Stephen N. Ndegwa, World Bank Country Director for the Pacific and Papua New Guinea. “It shows the strength of Pacific collaboration and that regional solutions are both essential and well-suited to keeping financial lifelines open.”

 

By joining the regional correspondent banking project, the Solomon Islands is proactively investing in its economic future — ensuring that its citizens remain globally connected and financially included. Through regional solidarity, global support, and strategic reforms, the Pacific is demonstrating that even its smallest nations can shape resilient financial systems that serve both local needs and global aspirations.