Impact of Remittances on Private Sector Credit in the Pacific Island Countries

Abstract

We examine the effect of remittances on private sector credit in the Pacific Islandcountries (PICs) using the data from 58 developing countries from 2004 to 2016. Theanalysis provides strong evidence that the effect of remittance inflows on privatesector credit for PICs is positive and higher than that for other developing countries.In addition, the per capita gross domestic product, official development assistance,the number of bank branches, and institutional quality are also positively associatedwith private sector credit in PICs, while the Consumer Price Index is negativelyassociated with private sector credit. These results have important implications for thedevelopment of financial sector in PICs.

Asymmetric Adjustment of the Sectorial Lendingdeposit Rate Spread in Fiji

“…Improvement in banking services over the years has been vital in providing greater access to financial services to Fijians. Remittances, one of the largest transfer inflows for many Fijians, has been found to be the major factor in private sector credit growth (Chen et al, 2020b). However, according to the Reserve Bank of Fiji (2015), banking services are largely clustered in the urban areas and around 27 percent of adults have limited or no access to financial services, most of whom are women, youth, and rural inhabitants.…”

The media and journalism challenges in Melanesia

“…The non-coercive external threats include inducements such as government advertising contracts, which could act as a leverage to influence news coverage, especially in the Pacific, where both advertising sources and revenue are limited. The state, as a central player in the small Pacific economies (see Chen & Singh, 2017;Chen et al, 2020) becomes a major advertiser through the various ministries, state corporations and other state-linked enterprises.…”