Three days at the SIDS Global Business Network Forum, and one word I want to argue with.

I have just come back from the Maldives, where I spent three days at the 6th SIDS Global Business Network Forum, discussing a range of issues with governments, investors, and business owners from Small Island Developing States (SIDS). The Forum was hosted by the Government of the Maldives and the Government of Antigua and Barbuda, in partnership with the United Nations Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States UN-OHRLLS.

Maldives President Mohamed Muizzu opened the Forum by arguing that island economies should be seen as sources of innovation and enterprise, not just through the lens of vulnerability, and that Micro, Small, and Medium-sized Enterprises (MSMEs) are where innovation happens.

Maldives President Mr. Mohamed Muizzu speaking at Forum.

He is right. And during the forum, speaker after speaker, hit on that challenge of financing: entrepreneurs who cannot borrow at a rate that lets them grow, banking systems too thin to provide sufficient capital, digital rails too expensive to justify across small, dispersed markets. To explain it all, one word kept coming back: smallness.

I want to push back on that, gently. What is at stake is not simply size. It is a mismatch between the businesses that exist and the financial system expected to serve them.

Smallness is a fact about island states. It is not why capital stays away.

Between 2015 and 2024, multilateral banks and development finance institutions committed USD 1.7 trillion worldwide. Only three percent, or $51 billion, reached SIDS [OECD, 2026]. Island states are MSME economies, and those micro, small, and medium-sized enterprises account for a significant share of private-sector activity. Yet of that $51 billion, only $5.6 billion went to MSMEs. Averaged across ten years, that is about $560 million a year in MSME financing across SIDS.

The size of financing is also poorly matched to the businesses seeking it. Eighty percent of what reaches island states sits in projects of $20 million or more, while many MSMEs are looking for financing between $50,000 and $300,000. The financing system is operating on one scale while the businesses are operating on another.

Is it a lack of pipelines? Or is it stuck?

The marketplace session at the Forum gave me some answers. These businesses exist, they can scale, and they can inspire other islands to replicate these solutions. They are just the wrong size for the system. The example of BlueGea, a company from the Dominican Republic, stayed with me. It collects sargassum at sea, before it reaches the beaches, and turns it into inputs for agriculture, cosmetics, nutrition and biomaterials: 30 million kilos so far, across six markets.

I spent the whole presentation thinking about the Pacific. While the immediate challenge being resolved by BlueGea is specific to the Caribbean, the model is not. Take a marine nuisance that already costs communities money, build the technology to address it, and sell what was previously treated as waste. There are Pacific versions of that waiting to be built, and this is the kind of business UNCDF is set up to support.

Businesses like this do not necessarily need $20 million at the outset. They need finance that can carry them from proof of concept to the point where larger-scale capital can move in.

Our partners made the case

Building that missing layer is central to UNCDF’s capital mandate. That point was reinforced at the Fourth International Conference on Financing for Development in Sevilla, where Member States formally recognized UNCDF’s role as an early-stage provider of catalytic concessional capital that can de-risk investment and create the conditions for larger sources of finance to follow.

At the forum in the Maldives, the most convincing case for why that matters was not made by us. It was made by two banks we work with.

The Women’s Micro Bank from Papua New Guinea, better known as Mama Bank, spoke at the AI and digitalization session. It lends to women, and what it described was not a technology story but a sequence: three to four years spent digitalizing banking systems, fixing credit processes, and learning to lend in the blue economy, culminating in a $2 million UNCDF guarantee. Their point: the years before the visible result are the ones that need funding.

Panel session at the SIDS Global Business Network Forum.

The Fiji Development Bank, a long-standing partner of UNCDF in the Pacific, spoke of its experience. Behind its lending sits a $1.5 million UNCDF guarantee for aquaculture, marine tourism and sustainable fishing. It has since taken a $15 million loan from the Asian Development Bank. One takes the first risk and builds the pipeline; a larger one scales it.

Maria Perdomo with Mr. Bimal Sudhakar, Chief Operations Officer at Fiji Development Bank.

Caribbean asking for insurance: the product exists

Hurricane Melissa was still in the room. After a storm that cost Jamaica an estimated $8.8 billion, the delegate from Jamaica was direct about insurance: how do island states protect themselves from the next one? The insurance the Caribbean is asking for exists. We built it in the Pacific, from nothing, and it took six years: training insurers, reforming regulation, explaining cover community by community, financing premiums, and building the mobile rails that carry the payouts. Parametric insurance now covers more than 66,000 households in Fiji, Tonga and six other Pacific countries, and a global reinsurance vehicle is finally in reach.

None of that has to be repeated. Jamaica should not spend six years rediscovering what the Pacific already learned, and it will not have to, if the market-building underneath the product is funded as deliberately as the product itself.

One thing I will be watching

The forum highlighted the SIDS Global Data Hub, which deserved more attention than it got. Several Pacific countries have no recent data at all on how many adults hold a bank account. You cannot underwrite a market you cannot measure, and missing data compounds missing ratings. Better data is not a side project. It is part of the financing fix.

I left the Maldives more convinced than when I arrived, mostly because of who was in the room: Mama Bank, the Fiji Development Bank, and businesses like BlueGea. Island states do not need another fund or another mechanism. They need the part of the system that does the groundwork to be funded properly and patiently, with grants and technical assistance alongside the de-risking capital and judged on what it leaves behind rather than how fast it moves.

Smallness is a feature of island economies. The financing mismatch around it is a choice. And that is something we can change.