Economic development in Vanuatu is hindered by dependence on relatively few commodity exports, vulnerability to natural disasters, and long distances to major markets. Strong factionalism continues to undermine policymaking. There is an overall lack of commitment to institutional reforms. Property rights are poorly protected, and investment is deterred by the country’s inadequate physical and legal infrastructure. High tariffs and nontariff barriers to trade hold back integration into the global marketplace
Vanuatu vatu (VUV)
There are no exchange controls in Vanuatu. Bank accounts may be in any currency, and international transfers are free of all controls.
Financial services industry
Financial services in Vanuatu are highly concentrated in the two urban areas of Port Vila and Luganville, and dominated by four commercial banks, a superannuation fund, and four domestically licensed general insurers. Of these stakeholders, only the National Bank of Vanuatu (NBV) is providing services on any scale to low income clients. These services are complemented by the two much smaller semi-formal providers, Vanuatu Women’s Development Scheme (VANWODS) and the Department of Cooperatives.
Since the last financial service sector assessment (FSSA) for Vanuatu in 2007, great progress has been made towards developing an inclusive financial sector in the country, with the number of people accessing financial services increasing by an average rate of 19% a year. Currently an estimated 19% of the population has access to formal or semi-formal financial services, and the percentage of the population with banking services is about half that of Fiji (39%), which benefits from a vastly more developed economy and concentrated population, and outperforms both Solomon Islands (15%) and Papua New Guinea (8%).