Five years ago, the small holder cocoa farmers of the East Sepik, in Papua New Guinea, knew little about finance or banking. Few of them had bank accounts; most had never been to a bank. They would grow their cocoa, sell it, and then spend the money giving little thought to savings.

When they ran out of money, they would borrow it from moneylenders or other businessmen, says Jonathan Poema, the Cocoa Coordinator and Chairperson of Ramangs Cocoa Development Project, a community-based cooperative that operates out of Paliama village, in the Wewak District of East Sepik province.

Those days of earning, spending quickly, and relying on moneylenders who charged high interest rates are now a thing of the past.

Jonathan Poema a small holder farmer in the East Sepik region of PNG checks out the cocoa beans from his trees in the sun drying house. Photo: UNCDF.

The transformation has been driven by a European Union initiative in partnership with the Government of Papua New Guinea. The EU funded Support to Rural Entrepreneurship, Investment and Trade Programme (EU-STREIT PNG), is a joint UN programme implemented by FAO in partnership with the United Nations Capital Development Fund (UNCDF), the International Labour Organization (ILO), the International Telecommunication Union (ITU), and the United Nations Development Programme (UNDP).

The six-year EU-STREIT PNG programme that kicked off in 2020, is the largest grant-funded initiative in the Pacific, based in Papua New Guinea. Its objective is to boost sustainable economic development in rural areas by empowering farmers and local agribusinesses, particularly focusing on cocoa, vanilla, and fisheries.

Approximately 75 percent of Papua New Guinea’s adult population is unbanked, with up to 85 percent remaining entirely excluded from formal financial services in rural areas. Most of the country's smallholder farmers and an estimated 90 percent of micro-enterprises operate exclusively in this informal, cash-based economy.

Without secure bank accounts, individuals must physically hoard cash, exposing rural households, farmers, and market vendors to a high risk of theft and violence. Unbanked micro and small businesses also lack a formal financial history, preventing them from securing loans needed to buy better agricultural equipment, scale their operations, or survive seasonal downturns.

Through UNCDF’s delivery of financial literacy, greater access to digital financial services, and stronger links to formal financial institutions, rural communities are adopting better financial habits.

Things changed after the EU-STREIT PNG Programme rolled out a series of financial literacy sessions, through MiBank, a micro-bank, says Poema. “They taught us about financing, banking, and financial management, and helped us open bank accounts.”

Jonathan Poema, a small holder Cocoa farmer in the East Sepik region of PNG, tends to his cocoa trees. Photo: UNCDF.

“Over the past five years, more than 127,900 farmers across East and West Sepik have opened bank and mobile money accounts through financial service providers including MiBank, Mama Bank, and the digital financial service provider CellMoni,” say Wycliffe Ngwabe, UNCDF’s Country Lead and Technical Specialist in PNG. “Many of these small businesses have moved from cash-based transactions to formal financial services, enabling them to save securely and receive payments digitally.“

According to Poema, most farmers now budget carefully, save regularly, and spend wisely. He says this improved financial management has enabled farming households to invest in higher-quality planting materials, while also helping meet household expenses such as school fees, healthcare, and unexpected expenses.

“They only rely on their own money because it is kept in that MiBank account,” he says. They also spend their money on home improvements and buying cooking utensils.

A key goal of the EU-STREIT PNG programme was to improve the financial wellbeing of communities in the Sepik region and create better economic opportunities. “We are well on our way there,” says Wycliffe, “the introduction of mobile banking has transformed financial inclusion in these rural communities.”

“Farmers can now access their accounts, transfer funds, and make transactions digitally without travelling long distances to town or carrying large amounts of cash,” adds Wycliffe. “This has reduced both the time and cost of accessing financial services, allowing farmers to spend more time on their farms and with their families.”