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Pacific Finance Sector Brief: Timor-Leste

Publication | October 2019
Pacific Finance Sector Brief: Timor-Leste

This brief provides an overview of Timor-Leste’s finance sector, and discusses the key challenges and how they can be addressed.

Timor-Leste has a relatively diverse financial system for a Pacific island country. It has four foreign-owned banks and one national bank, which serves as the monetary authority and regulator of most financial institutions. The finance sector also includes insurance companies, microfinance institutions, money transfer operators, financial cooperatives, and credit unions. Although Timor-Leste’s finance sector is progressing, some critical constraints remain. The cash-based economy makes payments inefficient and insecure, and small and medium-sized enterprises and rural businesses find it challenging to access affordable credit, which constrains private sector development. Improvements in the financial regulatory environment and the creation of more diverse financial products are priorities for the sector.