Papua New Guinea (PNG) is the largest and most populated of all the Pacific Island Countries (PICs) with a population of approximately 7.2 million people in 2012 speaking over 850 indigenous languages. About 40 percent of the population lives on less than $1 per day and 75 percent of households depend on subsistence agriculture. Forty-one percent of rural inhabitants compared to 16 percent of urban dwellers live in poverty and are harder to reach with service.
Economic growth averaged around seven percent over the last five years, largely driven by the PNG Liquefied Natural Gas (LNG) Project - the single largest investment in the country’s history (US$15 billion). As a result of economic growth, the country has achieved ‘lower middle-income’ status, with a per capita income of US$2,386. Despite the country’s wealth, available data show that human development indicators remain worryingly low, with limited access to health and education services, as well as high inequality . The country is not on track to meet any of its Millennium Development Goal (MDG) targets and ranks at 156 out of 187 countries in the 2012 Human Development Index, with over 80 percent of the population without access to basic financial services.
How We Are Helping?
The United Nations Capital Development Fund (UNCDF) is helping PNG to meet its development challenges through a combination of local development and access to finance initiatives. Since 2009, UNCDF, through the Pacific Financial Inclusion Programme (PFIP), has led the opening of the mobile money market through its sector development approach. UNCDF works closely with the Central Bank, Bank of PNG, to create an enabling regulatory environment. UNCDF provided technical and financial assistance to develop the country’s first National Financial Inclusion & Financial Literacy Strategy 2014/2015 as part of PNG’s Maya Declaration. UNCDF also supports the overall coordination of financial inclusion, both at the regional and country-level, through the Alliance for Financial Inclusion’s Pacific Island Working Group (AFI’s-PIWG) and through its partnership with PNG’s Centre for Excellence in Financial Inclusion (CEFI).
UNCDF has de-risked innovation in the country through investment and technical support to Nationwide Microbank’s MiCash, PNG’s first mobile wallet, and through co-investment with UNCDF’s MicroLead in Westpac InStore, a branchless banking model supporting access to finance through a network of rural-based agents. UNCDF’s research has enabled PNG to better understand the financial competency level of low-income Papua New Guineans and their financial habits, thereby helping the sector to design appropriate products and policy changes to scale-up financial inclusion across the country.
UNCDF’s support through local development was initiated in 2014. Through the diagnostic study LoOking, UNCDF will assist PNG to build its local capacity and local markets, including private sector, at the provincial and district levels.