IFC and Tonga Development Bank Partner to Support MSME Growth and Jobs in Tonga

Nuku'alofa, December 22, 2025- The International Finance Corporation (IFC), a member of the World Bank Group focused on the private sector, announced a partnership with Tonga Development Bank (TDB) to support micro, small and medium enterprises (MSMEs) and boost job creation in Tonga.

Tonga's economy has faced significant setbacks in recent years. The Hunga Tonga-Hunga Ha'apai volcanic eruption caused a tsunami that severely damaged tourism infrastructure, while the COVID-19 outbreak in early 2022 further strained businesses. These shocks, combined with longstanding gaps in access to financial services, have disproportionately limited the ability of MSMEs to grow, contribute to economic recovery, and create jobs.

To help address these constraints, IFC will provide TDB with an unfunded risk sharing facility of up to USD3 million equivalent in Tongan pa'anga under IFC's Small Loan Guarantee Program. The financing, which is supported by the International Development Association's (IDA) Private Sector Window and the Women Entrepreneurs Opportunity Facility (WEOF), will enable TDB to expand its SME lending. IFC will also provide technical assistance to strengthen TDB's capacity to support underserved MSMEs.

The risk sharing facility is expected to deliver economy-wide benefits by expanding access to finance for MSMEs, including women-owned businesses and enterprises in the tourism sector. Increased lending is anticipated to support job creation directly within SMEs and indirectly through supply chains and increased economic activity.

"TDB stands ready to offer increased support to our nation's vibrant entrepreneurs," said TDB Chief Executive Officer Kaho 'o Vailahi 'Ofa. "We are delighted to enter this new partnership with IFC, which follows our successful collaboration to introduce the 'Ave Pa'anga Pau remittance service."

"Tongan MSMEs face numerous constraints on their access to finance, stifling their potential contributions to the economy," said Allen Forlemu, IFC's Acting Regional Vice President for Asia and the Pacific. "

"With this investment, IFC aims to help close the financing gap and promote the growth of small businesses. By improving access to finance, this project will catalyze MSME development, support job creation, and help reduce unemployment in Tonga."