Debt in Vanuatu

Formal borrowing in Vanuatu is available through commercial banks, Vanuatu Rural Development Bank, credit unions and microfinance providers. Other arrangements include moneylenders, loans from relatives or friends, savings groups, pawning and employer credit. Access to formal credit remains limited: 2024 financial-access data reported overall credit access of about 14%, formal credit access of about 7% and loans from financial institutions during the previous 12 months for about 5.1% of people surveyed. Among formal credit users, about 87% used banks. High interest rates, the absence of a guarantor, limited repayment capacity and the uneven regional availability of providers can prevent borrowing. The Reserve Bank of Vanuatu (RBV) supervises banks, credit institutions, credit unions and financial cooperatives. Vanuatu does not have an overarching financial-consumer-protection law, and gaps remain in transparency, fees, payday lending, complaints and out-of-court dispute resolution. The RBV Financial Consumer Protection Guideline 07/2025 expects financial institutions to assess affordability, treat borrowers fairly after default and respond promptly and appropriately to hardship or restructuring requests. A written restructuring arrangement should state the total amount, instalment, payment frequency and interest. A lender should generally give at least 30 business days' default notice before enforcement. Default interest and fees should relate to the actual arrears and remain reasonable, while collection and enforcement costs need contractual support and must also be reasonable. Disclosures may be provided in English, Bislama or French. A borrower normally raises a complaint internally first; the RBV external dispute-resolution process operates outside court and its initial recommendation is not binding. The RBV listed an external dispute-resolution guideline in 2026. Vanuatu has historically relied on negative-only credit reporting. The RBV and International Finance Corporation have been developing comprehensive credit reporting that would include payment history and regulatory reform, but full implementation is not established by the available information. A security interest gives a creditor rights over specified property if the borrower defaults. For movable property, the Personal Property Securities Act No. 17 of 2008 uses the Personal Property Securities Register (PPSR). A registration identifies the debtor, secured party, collateral and expiry, and an individual can search the register. After default or when the collateral is at risk, the secured party may take possession and sell the property, subject to duties including obtaining the best price and giving at least 10 working days' sale notice. The debtor can redeem the collateral until sale. Reinstatement may be possible by paying the arrears, curing the other default and covering reasonable enforcement expenses. A land mortgage follows a different court-based path through the Supreme Court, including power of sale or an enforcement warrant; no general protection against realisation of mortgaged land is established here. A creditor with a money order can seek an enforcement order or an enforcement conference under Part 14 of the Civil Procedure Rules No. 49 of 2002. Available measures can include seizure and sale of property, redirection of debts or earnings, a charging order or appointment of a receiver. The Sheriff or Police may act as enforcement officers, and a warrant can operate nationally. Ordinary enforcement lasts six years from the order unless the court grants leave to continue. Under the Limitation Act, an action on a judgment is generally limited to 12 years and recovery of interest arrears to six years. A person cannot be imprisoned solely for failing to pay a civil debt. Corporate debt has formal compromise, receivership and liquidation procedures under the Companies (Insolvency and Receivership) Act No. 3 of 2013, which commenced on 31 August 2015. A compromise can be proposed by directors, a receiver, a liquidator or a creditor whose debt exceeds VT120,000 or 25% of the company's net assets, whichever threshold is lower. Once approved, it binds the affected creditor class, although a secured creditor can opt out. A statutory demand concerns a due debt of at least VT120,000 and gives 15 working days for payment, compromise, composition or charging arrangements. The court can set it aside within 10 working days where there is a substantial dispute, counterclaim or set-off. Liquidation can begin through the board, shareholders or the court, including on a creditor's application. Ignoring a statutory demand, unsuccessful execution, appointing a receiver or failing to approve a compromise can support a presumption that the company cannot pay its debts. A receiver must generally notify the grantor, the public and the Registrar within five working days. Preferential claims are paid first, while other claims generally rank equally and share proportionally. Cross-border cases can involve the Cross-Border Insolvency Act No. 4 of 2013. For private individuals, current official material clearly supports corporate insolvency and receivership but does not establish a current general personal-insolvency, consumer-debt-discharge or standard debt-repayment-order system. Functional alternatives include a hardship request to the lender, written restructuring, refinancing, negotiated instalments, redemption or reinstatement of PPSR collateral, an enforcement conference and limited civil legal assistance from the Office of the Public Solicitor. The Official Receiver and Corporate Business Dispute Services and the Office of the Public Solicitor have defined institutional roles, but no general government debt-relief office is identified. Repayment, a secured sale, judgment enforcement, corporate compromise or liquidation may leave a shortfall, and no automatic discharge is evidenced. The Ministry of Finance and Economic Management Central Debt Unit and Debt Management Office handle government borrowing strategy, debt records, reports, settlements and payments. Government debt was about VT58 billion, or around 44% of GDP, in December 2024, and the Medium-Term Debt Strategy covers 2025 to 2028. Public debt management is separate from advice or relief for a household's private loan.