COVID-19 and Financing Growth
COVID-19 will have a sustained impact on public finance and finance sectors across the Pacific.
A key element of fiscal recovery across the Pacific will be identifying ways to reduce dependence on government spending and raise employment. The private sector will play a key role in achieving this, aided by efforts in the finance sector to ensure that credit is available and is distributed most effectively—to viable businesses that can drive economic recovery and continued growth through job creation and increased tax revenues.
PSDI can provide immediate advice on any emergency interventions involving financial institutions. This includes assisting with the design of capital projections models that clarify the impact of an intervention on the capital position of banks and other institutions and providing advice on any loan or guarantee products implemented by governments.
PSDI will also continue its ongoing work with Pacific banks—particularly government-owned banks—and retirement funds to help preserve their strength during the COVID-19 emergency response, reduce their reliance on government funds, and increase their ability to provide credit to the private sector.
This will include providing advice and analysis on the future role of government-owned banks in the Pacific; designing and implementing loan products and other financing instruments secured against movable assets; assisting with loan recovery and loan workout strategies; building credit assessment and risk management capacity, strengthening retirement funds’ investment management frameworks; and providing advice on funds’ potential financing activities.
PSDI is able to provide advice on the implementation of alternative financing platforms, such as equity crowdsource funding and peer-to-peer lending, which have the potential to become important providers of finance, especially if COVID-19 causes banks to become more risk averse.
For more information on PSDI's COVID-19 activities, click here.