Peter M. lives and works in Auki, the capital of Malaita Province, in the Solomon Islands. He’s a beneficiary of the Rural Development Programme (RDP) a $30 million initiative co-financed by the World Bank, AusAid, European Union and IFAD, which has been supporting remote communities, rural populations and small businesses since 2009. Peter's core business is collecting copra from local suppliers, crushing and bagging it for animal feed or pressing and processing it into soap bars. In 2010 he received a Supplemental Equity Facility (SEF) grant of $6K, matched it with his own $6K and secured a collateral-based loan of $18K from a local commercial bank. He invested the total - $30K – in a new processing machine. Peter’s been making rapid progress since making the investment, having recently repaid his loan, he collects copra from 10 regular suppliers, had sales worth around $47K in 2010, $54K in 2011 and he predicts a similar increase of around 10-12% in 2012. In his words “… without the SEF probably the bank wouldn’t have given me a loan … now I’m making decent money and I’m ready to expand again … this time I probably have enough of my own money to invest.”
The SEF is smart because it uses quite small amounts of programme funds to leverage relatively large sums of private – business and bank – money. But it is also smart because it relies on the banks to screen applications, in accordance with both programme and bank criteria, and to manage the repayment of loans; this reduces the programme management costs to a minimum, which is significant because the costs of managing programmes in the Pacific tend to far exceed those in other developing parts of the world.