The Tongan government will establish a domestic bond market to improve business access to affordable finance, Prime Minister Dr ‘Aisake Eke announced last Friday. Speaking at a press conference in Nuku’alofa, Dr Eke said the initiative aims to reduce borrowing costs for local businesses, many of which currently rely on high-interest loans or personal capital. “The government’s focus will be to help businesses grow and thrive and multiply in numbers,” he said, adding that the bond market would be a key feature of the upcoming national budget. The move follows Dr Eke’s recent meetings with the World Bank and Asian Development Bank (ADB), where discussions centred on expanding private sector access to finance. The ADB has offered to provide loans directly to businesses at rates lower than the current three percent benchmark set by the World Bank and Tonga’s Reserve Bank. The ADB also plans to offer targeted support for women-led enterprises. In a significant development, Tonga has authorised the ADB to issue bonds in the local currency, paʻanga, both domestically and internationally. This decision, formalised during the ADB’s 58th Annual Meeting in Milan, aims to bolster financial market development and reduce reliance on foreign exchange, thereby enhancing economic resilience. The bond market initiative is part of a broader strategy to stimulate Tonga’s economy, which continues to recover from the 2022 Hunga-Tonga-Hunga-Ha’apai volcanic eruption. The World Bank has provided a US$25 million grant to strengthen the country’s financial and disaster resilience. Dr Eke emphasised that the government is committed to supporting the private sector through these financial reforms, aiming to create a more conducive environment for business growth and economic development.