Senior representatives from government ministries, the reserve bank, donor agencies, mobile network operators and commercial banks attended a knowledge sharing event at the Tanoa Plaza on 25 July in Suva to learn of emerging trends and opportunities to link government to persons (G2P) payments (like to bring previously unbanked people into the formal financial system.
It was also revealed that when government make these payments into a savings-linked account it enables recipients, usually the poor and disadvantaged, to accumulate capital and, over time, improve the family’s wellbeing. The event was organized by the Pacific Financial Inclusion Programme (PFIP). The event focused on the success the Department of Social Welfare’s switch from a manual system of voucher books to an electronic payment system linked to a bank account.
The project, funded by the Fiji Australian AID Programme has provided over 22,000 social welfare recipients with Westpac Handy card accounts. The majority of these recipients were previously unbanked. During the event PFIP also launched its report “G2P: Expanding Financial Inclusion in the Pacific Report - Fiji’s Transfer of Social Welfare Recipients to a Savings-linked Electronic Payment System”, detailing the lessons learnt in rolling out Fiji’s G2P initiative. The report provides an honest account of how the project was conceived and implemented – including the many challenges that had to be overcome and highlighted the importance of all key stakeholders working in a coordinated fashion.
PFIP Consultant Matt Leonard, the author of the report, presented examples of G2P from around the world and discussed how electronic, savings-linked payment systems can help enhance financial inclusion as well as provide enduring benefits to low income people. Other speakers included, Mr. Govind Sami, Permanent Secretary from the Ministry of Women, Social Welfare and Poverty Alleviation, Ms. Caroline Pickering of the Fiji Financial Intelligence Unit and Ms. Olive Whippy, Head of Microfinance, Westpac Banking Corporation.
The success of the transfer of up to 85% of Social Welfare clients has led to an increase in Westpac’s coverage and clientele by 10% and has freed up significant staff resources and costs to the Department of Social Welfare to focus on their core functions. Social welfare clients are now able to save and access their welfare payments from multiple Westpac branches, ATM’s and POS merchants throughout Fiji – reducing the traveling and waiting time and costs many had to bear with the previous voucher book system. The bank account also enabled recipients to save, many for the first time, and an average balance of around $10 per client has been recorded to date. Previously recipients would have to cash the entire value of their monthly voucher.
Fiji’s case study will also be highlighted in the regional G2P workshop during the Pacific Microfinance week in Port Villa, Vanuatu, from 26 to 29 July 2011. The Pacific Financial Inclusion Programme (PFIP) is a Pacific-wide programme helping to provide sustainable financial services to low income households. It is funded by the Australian Agency for International Development (AusAID), the UN Capital Development Fund (UNCDF), the European Union (EU) and the United Nations Development Programme (UNDP) and operates from the UNDP Pacific Centre.