Credit Corporation Solomon Islands was significantly impacted by the weak economic conditions during FY18.
Credit Corporation (SI) Limited
The Solomon Islands GDP grew by an estimated 3.2% in 2018 and is set to increase by 3% in 2019, driven by agriculture, fishing, construction, manufacturing plus tourism-related sectors. A recent positive development for the country has been the inauguration of a $144m Coral Sea Cable System between the Australian and Solomon Islands governments. The submarine fibre optic cable will link Sydney to Honiara in Solomon Islands, as well as to Port Moresby in Papua New Guinea. Australia will also aid in the construction of a Solomon Islands domestic broadband network, which has been described as “game-changing infrastructure.” Despite this, Solomon Islands continues to face a challenging business environment as evidenced by a growing number of overdue loans. The business focus for CC Solomon Islands has been on managing loan book quality. Looking ahead to FY19, it is hoped that the incoming government can assist in further economic stimulus.
Solomon Islands Performance in FY18
Credit Corporation Solomon Islands was significantly impacted by the weak economic conditions during FY18. Lending volumes slowed considerably throughout the year and the year ended with SBD$26m (K10.7m) in new loans, compared with SBD$54m (K22.3m) in 2017. The business delivered a NPAT of SBD$272k (K109k), further compounded by impairment provisions of SBD$18m (~K7.6m) relating to the reclassification of loan arrears and delinquent accounts. Efforts will be stepped up in the coming year to stabilise the operations of the business.