The Bank of Papua New Guinea (Bank PNG), with technical and financial assistance from the Pacific Financial Inclusion Program (PFIP), and the Centre for Excellence in Financial Inclusion (CEFI) convened stakeholders to build on the priorities for financial inclusion in the Informal Economic Policy 2011, and establish targets for 2014 and 2015 in the country’s first ever national strategy on financial inclusion and financial literacy. Commercial Banks, Micro-banks Post PNG and other participating non-bank financial institutions together committed to reach 1.6 million more unbanked and underserved Papua New Guineans by end of 2015, of which 50% will be low income women.
This is the first time a diverse range of stakeholders came together to identify what regulatory and market conditions are necessary to encourage innovation and scale, and commit to overcoming the challenges of building an inclusive financial sector in Papua New Guinea. Most importantly, this is the first time stakeholders have, through a consultative process, identified action items, timeline and outputs for the seven priority areas of financial inclusion.
Representatives from the workshop, Increasing Women’s Access to Financial Services, held on August 20, tabled their recommendations at the National Workshop. Stakeholders agreed to increase outreach to women to represent 50% of financial services portfolio, and to develop products that are appropriate for rural women. In Group 1, Financial Education and Literacy, providers and community leaders identified the importance of creating a financially savvy and competent generation of Papua New Guineans through incorporating financial education in school curriculum. “We cannot develop a sustainable economy unless every man and woman learn money management”, said Honorable Don Polye, Minister for Treasury. They was resounding consensus on the importance of identifying minimum key learning outcomes that financial literacy providers must cover, which include the 13 competency areas recommended by the Financial Competency Survey, which the Bank of PNG and PFIP carried out earlier this year.
In Group 2, Consumer Protection and Market Conduct, regulators, donors, representatives from the media and rural areas recognized the critical need to create a platform for various regulators to meet regularly to ensure consumer protection in order to protect the low-income consumers and give them a voice. In Group 3, Deepening Rural, Branchless and Mobile Banking, stakeholders identified the need to help move forward the regulation and implementation for universal ID proposal and to have regular meetings to solve the challenges of working in a difficult terrain like Papua New Guinea.
In Group 4, Demand Driven Research and Data, research institutes, donors, government representatives and other participants agreed to identify measures for key dimensions of financial inclusion (e.g. % of population within 1 hour travel of a branch/agent) that can be regularly updated, and establish systems for regular reporting/collection of information needed to measure the defined indicators. In Group 5, Integrating Financial Inclusion in Local & National Government, participants identified the need to formalize working relationships between various government departments working on areas in financial inclusion and financial literacy at a national level and to provide guidance and framework for implementing this area collaboratively at the provincial and district level.
And finally in Group 6, Micro-enterprise Financing, it was agreed that a risk share facility targeting Micro Enterprise is critical to facilitate lending to informal enterprises in the country.
According to Bank of PNG Governor Loi Bakani, “we must together pursue our commitment to building an inclusive financial sector”. He also stressed the need for district level consultations with key stakeholders to understand and recognize the importance of financial inclusion and financial literacy that leads to economically sustainable communities. Improved level of awareness in this area would hopefully improve the way District Services Implementation Programs are framed to ensure financial literacy programs are given the support at the District and LLG levels.
The Outputs of the Workshop’s Working Groups on seven areas of financial inclusion in PNG can be found at https://www.pfip.org/events/upcoming-recent-events/ and www.thecefi.com.org.
Bank of Papua New Guinea (Bank PNG) www.bankpng.gov.pg
Centre for Excellence in Financial Inclusion (CEFI) is designed to be the coordinating entity for all initiatives related to financial inclusion by driving the National Strategy for Financial Inclusion in PNG. National Executive Council, on 26 June 2013, endorsed the CEFI as the apex institution to drive the national strategy for financial inclusion in the country and coordinate all initiatives related to financial inclusion in PNG. www.thecefi.org
The Pacific Financial Inclusion Programme (PFIP) is a joint programme of the United Nations Capital Development Fund (UNCDF) and United Nations Development Programme (UNDP) with additional funding support from the Australian Agency for International Development (AusAID) and the European Union/Africa, Caribbean and Pacific Microfinance Framework Programme (EU/ACP). www.pfip.org