IFC partners with BRED Banks to expand SME and commercial financing in Pacific

The initiative aims to strengthen business growth, job creation, and economic resilience across Vanuatu and the Solomon Islands—two Pacific economies highly vulnerable to climate shocks and natural disasters.

The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has announced a new partnership with BRED Bank Vanuatu and BRED Bank Solomon to improve access to financing for institutional commercial customers. The initiative aims to strengthen business growth, job creation, and economic resilience across Vanuatu and the Solomon Islands—two Pacific economies highly vulnerable to climate shocks and natural disasters.

Addressing Critical Financing Gaps for Pacific Businesses

Small and medium enterprises (SMEs) and commercial companies form the backbone of economic activity in both countries. They contribute significantly to employment, innovation, and market diversification. However, these businesses continue to face major constraints in obtaining financing, particularly due to high collateral requirements, limited financial products, and persistent disruptions caused by cyclones, earthquakes, and other natural hazards.

IFC’s partnership seeks to narrow these financing gaps by enabling local banks to extend larger volumes of business loans. The financing structure includes an unfunded risk-sharing facility with a maximum IFC risk exposure of US$10 million under IFC’s Small Loan Guarantee Program. This arrangement is supported by the International Development Association’s (IDA) Private Sector Window, aimed at reducing financial sector risks in lower-income and fragile economies.

Expanding Lending Capacity and Strengthening Institutions

The risk-sharing model will allow BRED Bank Vanuatu and BRED Bank Solomon to significantly increase their lending to SMEs and institutional commercial clients—firms that often struggle to secure the capital required for expansion, equipment upgrades, or new business ventures. IFC will complement the facility with advisory services to help both banks strengthen commercial lending practices, refine credit risk frameworks, and scale their business finance portfolios.

IFC analysis indicates that expanding commercial lending across the two countries will generate broad economy-wide impacts by stimulating investment, supporting enterprise resilience, and creating both direct and indirect employment opportunities.

Long-standing Collaboration Reinforced

Owen Thomson, CEO of BRED Solomon Islands, highlighted the strategic importance of the collaboration:“As the leading bank in Vanuatu and a growing presence in Solomon Islands, BRED is uniquely placed to help drive growth and resilience across SME and commercial markets. BRED and IFC have a long-standing global strategic partnership with a successful track record of collaborating on projects. We welcome this investment, which will enable us to expand our business-segment financing portfolio in Vanuatu and Solomon Islands, supporting the small businesses that are fundamental to growth in these economies.”

Allen Forlemu, IFC’s Acting Regional Vice President for Asia and the Pacific, emphasized the broader development value of the partnership:“Many SMEs in Vanuatu and Solomon Islands struggle to access the capital they need to grow, hire, innovate, and fully contribute to their economies. With this investment, IFC aims to increase lending to SMEs and commercial segment borrowers and reduce the financing gap in both countries—clear actions to drive economic growth and create jobs.”

Strengthening Resilience and Economic Recovery

This partnership comes at a time when Pacific economies face heightened uncertainty amid climate-related disasters, rising operational costs, and limited diversification. Improved financial access will help businesses invest in productive assets, strengthen resilience, and pursue opportunities in sectors such as tourism, agriculture, logistics, and services.

By enabling banks to extend more credit and foster sustainable enterprise growth, IFC is helping lay the groundwork for more resilient and inclusive economic development across Vanuatu and the Solomon Islands.