the country. i ’ ll give the example of 2007 – the economy declined by 6. 6per cent and the banks made huge profits. i have all the information with me – what each bank makes, what is their spread, for how long and how they quickly adjust their rates to maintain their profitability. so, it ’ s the rest of the population which bears the brunt of adjustment while the banks maintain their profitability. to me that is unacceptable. i want to give a very clear signal to the banks that i ’ m not interested in controlling the interest rates but i want to see banks behaving responsibly in our economy. they must support the growth of our economy. they operate here. if we all do well, we all benefit, if we go down, let ’ s all go down together. i do not like some sections to take advantage of the situation. that is my sole reason to introduce the policy, which is very unprecedented. question 7 : how will the devaluation affect the sugar industry and agricultural sector? answer : very positive – they will get 20 per cent more revenue immediately and they ’ ll be encouraged to grow more food, those who are exporting eggplants, chilies and all sort of things, i would encourage them to grow more food – not only for exports, but grow more food for local consumption as well. and this devaluation is going to give that nudge which was required. question 8 : going back to banks – very soon banks will be advised to open up micro finance units, what is the purpose of micro - finance and how will it affect the economic growth? answer : that is another area that we have been having long conversations for a number of years, as far as 20 years back. i ’ ve been personally talking to banks. please, can you do something, change your banking practices, and don ’ t just concentrate on big businesses. you ’ re operating in fiji. we are a developing country. we are spread along the islands. see how we can grow the rural sector. that ’ s where the future of the country is. it ’ s the rural sector we need to grow. without the right kind of financing structure our rural sector can not grow. they have all the resources – fiji doesn ’ t lack resources. it ’ s got all the resources it needs. we need somehow to get the capital to work with the resources. and the banking system can facilitate that. this

risk than the traditional banks and their cost of funds has also been higher. they have to work hard to keep their customers over the longer term as many tend to graduate to the banks as they become more successful. indeed competition across the whole banking system has noticeably stepped up in the last five years and customer bis central bankers ’ speeches allegiance is almost a thing of the past. no doubt each bank and credit institution is now being judged by its level of service. despite the intense competition, i think it is fair to say that our credit institutions have persevered in their niche areas and continue to perform well, backed by strong capital positions and satisfactory earnings performances. the combined balance sheet of the credit institutions recorded an annual growth of 33 percent over 2015, to reach $ 335million, with merchant finance limited contributing almost half. at the end of last year, combined credit institutions ’ net profit before tax stood at $ 18 million with capital and reserves growing 13 percent to $ 72 million. merchant finance limited please allow me to share a brief history of merchant finance limited. officially established in 1986 as the merchant bank of fiji, this institution initially operated as a finance company and since it did not take deposits from the public it did not come under the supervision of the reserve bank. this all changed in 1992 when we granted the company a licence to operate as a credit institution, enabling it to access public deposits. in 2002 the merchant bank of fiji changed its name to merchant finance & investment limited. further approval was granted in late 2014 to make another name change. this is the name we are actually launching tonight – merchant finance limited. so this year merchant finance limited actually enters its 24th year of serving the people of fiji as a licensed credit institution. the company has grown significantly, with an asset book of $ 21 million in 1992 to a publically reported $ 134 million in june 2015. the profitability of the institution has also increased over the years noting an ‘ all time high ’ of just over $ 8 million in its last financial year. ladies and gentlemen, as the supervisor of the banking industry, the reserve bank closely observes the relationships of our licensed financial institutions with the other sectors of the economy. as i alluded to earlier, credit institutions like merchant finance limited play the unique yet important role of servicing customers and sectors which the banks may consider as high - risk. it is pleasing to see that merchant finance limited ’ s reach as a lender has extended to many key sectors in the economy, such as transport