risk with government. public and private sector partnerships such as these are exactly what our country needs to boost domestic growth and improve our overall economic wellbeing. an advantage of the above scheme is that it can be used in conjunction with current loan schemes, including existing flood rehabilitation facilities to alleviate collateral requirements for flood affected smes. fiji economy i guess no governor ’ s speech is complete without coverage of the outlook for the fiji economy and i do not intend to disappoint. that being said, our current estimates for economic growth sees fiji expanding by around 2. 3 percent in 2012 following growth of 2. 1 percent last year. however, as i speak, the economic forecasts are being re - examined in light of the recent floods that have affected infrastructure, crops and businesses. our domestic growth forecast is broad - based with improvements expected in most economic sectors. the downside risks to this projection are expected to stem largely from the recent floods which greatly affected the livelihoods of those in the western division. however, this will be partly offset by necessary replanting, re - construction and other capital infrastructure work. the blessing, if there is a blessing to be had in all the sadness and misery of the natural disasters, is that our tourism industry was little affected and, in addition, it is still early in the year and with a lot of hard work there is time to “ catch up ”. our foreign reserves remain healthy at around $ 1. 5 billion ( or just under 5 months of imports ) and inflation has been bis central bankers ’ speeches trending downwards. furthermore, bank credit has picked up and new loans in the first few months of 2012 are higher than in the comparable period last year. at this point it would be remiss of me not to acknowledge and commend the lending sectors efforts in assisting our local community to recover from the effects of the january and march floods. our financial institutions, including anz, have contributed generously towards flood relief through a number of local charities, including the fiji red cross and the prime minister ’ s flood relief appeal. it is also pleasing to note the financial support that they have extended to affected customers, including the temporary suspension on loan repayments, adjustments to lending limits and waiver of selected fees and charges. these acts of generosity and empathy go a long way in maintaining customer loyalty, sustaining business and ultimately contributing to future growth. they also show our hearts lie with our country and fellow citizens. commercial bank lending to sm

##es ladies and gentlemen, commercial bank lending to private sector businesses currently stands at just over $ 2. 0 billion. our records show that of this total, the 15 largest business loans from each of fiji ’ s four commercial banks make up close to 60 percent, while lending to micro businesses and smes account for just 8 percent. there is definitely room for this to grow. i am particularly pleased to highlight that commercial banks have already given around $ 10 million in loans under the sme credit guarantee scheme since the facility was introduced in january this year. with an interest rate pegged at no greater than 10 percent per annum this should greatly assist businesses. we hope that within 5 years, the share of sme loans would double to around 16 percent of total lending. anz sme scheme ladies and gentlemen, i understand that anz ’ s commitment and work in the sme sector is something that has been honed over the last 5 years, with particular focus on streamlining processes and improving access to affordable finance. the creation of a 20 - staff sme team to serve all parts of fiji will positively impact sme growth in both credit and numbers. in addition, anz ’ s efforts in working together with local regulators and sme operators is welcome news for sector engagement towards sme development. the reserve bank is always grateful to financial institutions that assume additional responsibility and take the initiative in accommodating government and rbf supported policies, as this portrays an alignment of our goals in taking the economy forward. the reserve bank is confident that the combined efforts of anz and other financial institutions in taking the new scheme on board, will act as a platform for sme growth and is a step towards realising his sector ’ s true potential. in closing, i wish your team every success in the launch of this new product and thank anz bank for the continued confidence and commitment towards the development of both the sme sector and the fiji economy. vinaka vakalevu. bis central bankers ’ speeches