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.”
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2025, IFC committed a record $71.7 billion to private companies and financial institutions in developing countries, leveraging private sector solutions and mobilizing private capital to create a world free of poverty on a livable planet. For more information, visit www.ifc.org.
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About the IDA Private Sector Window
The International Development Association’s Private Sector Window (IDA PSW) was launched in 2017 to catalyze private sector investment in the poorest and most fragile countries. Recognizing the key role of the private sector in creating jobs and promoting economic transformation, the window provides a source of co-investment funding and guarantees to de-risk private investments supported by the World Bank Group’s International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). The IDA PSW is an option when there is no commercial solution and the Bank Group’s other tools are insufficient. For more information, visit: http://ida.worldbank.org/psw.
About WEOF
WEOF is an initiative launched by IFC in partnership with the Goldman Sachs Foundation to help expand access to capital for women entrepreneurs in developing countries and demonstrate the commercial viability of investing in women.
About Tonga Development Bank
Tonga Development Bank is a development finance institution that promotes Tonga's economic and social advancement through a variety of banking services. TDB's vision is to be recognized as a significant provider of banking finance in Tonga which employs prudent banking principles to meet customer needs, demonstrates integrity and operates profitably. TDB's mission is to be committed to promoting Tonga’s economic and social advancement by providing quality banking products and responsive professional services, while operating profitably as a financially sound banking institution.
For more information, visit: https://tdb.to/.
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