Reserve Bank of Fiji Governor Ariff Ali. [File Photo]

Micro, small and medium enterprises continue to face challenges in keeping afloat, says Reserve Bank of Fiji Governor Ariff Ali.

Ali highlighted this while making a submission on the Audit Report on Compliance Audits Relating to COVID-19 Response before the Standing Committee.

He says under the COVID-19 recovery guarantee scheme, they have been able to assist 5,500 SMEs who were not able to meet their financial needs.

“So if you do not have cash flow because of COVID than the banks will be hesitant to lend. When you look at the guarantee scheme that was announced in the budget whereby the government will pay interest in the first two years, the take has been very strong. 5,500 business, of that almost 4000 businesses are micro and small businesses.”

Ali goes on to say that when the economy contracted by 17.2 percent, SMEs were the first to suffer, and a number of businesses closed while large businesses struggled.

The RBF has lent about $350 million to 300 customers under the Disaster Recovery Facility and $500 million to 261 companies through the Import Substitution and Export Finance Facility.