ADB2021-10-052021-10-052019-10N/AN/AN/AN/Ahttps://www.adb.org/publications/pacific-finance-sector-palauhttps://hdl.handle.net/20.500.14540/5557This brief provides an overview of Palau’s finance sector, and discusses the key challenges and how they can be addressed. Palau has one of the most monetized economies in the Pacific, but credit growth is sluggish due to legal prohibitions and structural deficits. The country’s financial system is reasonably diverse with five commercial banks operating, three of which are foreign-owned. It also has its own development bank, the National Development Bank of Palau, as well as access to services of the Pacific Islands Development Bank. Palau has a social security retirement fund and an insurance corporation. A priority for the finance sector is to reduce the structural and legal impediments that restrict commercial bank lending.4Economic dataFinance sector developmentFinancial institutions and servicesFinancial marketsFinancial sectorFormal banking institutions