With extensive networks in the Pacific business community, PTI Australia collaborated with Pacific Readiness for Investment in Social Enterprise (Pacific RISE) to connect Tongan businesses to a new impact investment fund – supporting economic development and helping to stem the flow of people and skills from the region.
Good Return has been working in the Pacific since 2005, empowering communities and businesses through increasing access to responsible, inclusive financial education. Over the last two years, having identified a ‘missing middle’ in the business community — those too large for microfinance but unable to obtain commercial lending due to structural barriers and capacity building needs — Good Return launched its first impact investment program first in Solomon Islands and then in Tonga.
In the program, Good Return works with financial service providers to de-risk loans to businesses that may otherwise fall short of accessing this commercial capital. The organisation typically does this through building enterprises’ capacity and providing a loan guarantee – reducing the risk to the financial service provider.
Over time, it is anticipated that increasing investment in these under-served businesses, supported by Good Return’s loan guarantee scheme, will help to influence future risk assessments and remove the need for Good Return’s loan guarantee.
Gender lens investing is integral to Good Return’s impact investment program and it works with financial service providers to build awareness and address barriers to access (particularly for women) and improve products and services which respond to both women’s and men’s needs and preferences.
In Tonga, Good Return partnered with the Tonga Chamber of Commerce and Industry to support the vanilla farmers of ‘Eua Island to enhance their financial skills – running training sessions with both husband and wife on cash flow, forecasting and budget management and providing coaching with the farming couples to develop their business plans before they applied for a loan.
PTI Australia introduced the Good Return team to Heilala Vanilla – the largest buyer of vanilla in Tonga. With Heilala Vanilla as a guaranteed buyer, Good Return and Tonga Chamber of Commerce and Industry were able to support three ‘Eua vanilla farming couples to develop their financial skills and business plans to successfully access finance through the Tonga Development Bank.
To date, these loans have been used to buy fencing and other farming tools – helping farmers increase productivity by protecting their crops from theft and roaming livestock.
Although Good Return’s impact investment program is new, this increased productivity with Heilala Vanilla as a guaranteed buyer of the crops could lead to increased demand for seasonal workers on ‘Eua Island and may give farmers the opportunity to acquire more land through increased business profits.
More broadly, these changes could help stem the flow of people and skills leaving Tonga, and reduce reliance on remittances.
Pacific Regional Manager at Good Return, Jessie Fisher, said “The real goal for our impact investment program is to support job growth in rural and remote communities so people don’t need to migrate to find work, by supporting businesses to innovate and grow into the future.”
“We’re growing this program and learning a lot. Having partners like PTI Australia and Pacific RISE is very important because they’re so engaged in the Pacific and have incredible networks.”
“It’s a collaborative, open relationship where all sides are working to get the best for Pacific entrepreneurs – whatever stage they are at.”