ADB Approves $9 Million Grant to Expand Finance for Women Entrepreneurs in Tonga

“The project is ADB’s first finance sector initiative dedicated to women entrepreneurs in Tonga,” said Aaron Batten, Regional Director of ADB’s Pacific Subregional Office.

The Asian Development Bank (ADB) has approved a $9 million grant to expand access to finance and unlock new business opportunities for women entrepreneurs in Tonga, with a focus on strengthening women-owned and women-led micro, small, and medium-sized enterprises (MSMEs). The initiative aims to address long-standing structural barriers that limit women’s participation in the private sector and constrain inclusive economic growth in the country.

The Women Entrepreneurs Leveraging Innovative Finance in Tonga Project will support the development of inclusive financial products, targeted business support services, and policy reforms that promote a more enabling environment for private sector development. By improving access to capital and skills, the project seeks to help women entrepreneurs scale their businesses, increase productivity, and create jobs.

“The project is ADB’s first finance sector initiative dedicated to women entrepreneurs in Tonga,” said Aaron Batten, Regional Director of ADB’s Pacific Subregional Office. “It will unlock bank lending for women entrepreneurs to help them grow their businesses and contribute more fully to Tonga’s economy.”

Addressing barriers to women’s entrepreneurship

Women entrepreneurs in Tonga face multiple challenges in starting and expanding businesses. These include limited access to formal finance, often due to a lack of acceptable collateral linked to land ownership restrictions; high levels of informality among women-led enterprises; and insufficient access to business development services (BDS) and market networks. These constraints limit growth potential and reduce women’s ability to participate in value chains and formal markets.

The project is designed to systematically address these barriers through a combination of financial innovation, capacity building, and institutional strengthening.

Innovative financing and tailored business support

A central feature of the project is the establishment of Tonga’s first risk-sharing facility, which will reduce lending risks for financial institutions and expand credit to women entrepreneurs through partial credit guarantees. By easing collateral requirements, the facility is expected to encourage banks to extend loans to viable women-led MSMEs that would otherwise remain excluded from formal finance.

To complement this, the project will introduce an enablement fund that provides small grants to informal and early-stage women-led businesses. These grants will help enterprises improve their financial records, compliance, and business models, making them more bankable and better positioned to access formal credit.

In addition, a business advisory hub will be established to deliver tailored BDS, including mentoring, financial management, digital tools, market access support, and growth planning. The project will also strengthen women’s financial literacy, digital capabilities, and entrepreneurial skills, ensuring that access to finance is matched with the capacity to use it effectively.

Advancing inclusive growth in Tonga

By supporting women entrepreneurs, the project is expected to contribute to job creation, income generation, and economic diversification, particularly in sectors where women are already active, such as services, agribusiness, tourism-related activities, and small-scale manufacturing. Improved access to finance and skills will also help women-led MSMEs transition from informality to formality, strengthening the overall private sector ecosystem.

Financing support

The $9 million grant is financed through ADB’s Asian Development Fund (ADF), which provides grants to the poorest and most vulnerable countries in Asia and the Pacific. Between 2021 and 2024, the ADF supported 384,000 people in escaping poverty and helped generate around 500,000 jobs, highlighting its role in promoting inclusive and sustainable development across the region.

ADB emphasized that the project aligns with its broader commitment to gender equality, private sector development, and financial inclusion in the Pacific, and could serve as a model for similar initiatives in other small island developing states.