Papua New Guinea’s Treasurer Don Polye launched the National Financial Inclusion and Financial Literacy Strategy 2014-2015 at the annual Financial Inclusion Expo organized by the Bank of PNG on December 5th, 2013. Treasure Don Polye, who was recently elected as Chairman of Board of Governors of the IMF and the World Bank, acknowledged His Excellency Martin Dihm, the European Union Ambassador to PNG and Minister Stuart Schaefer of the Australian Government’s Department of Development Cooperation in PNG, for their funding support to the Pacific Financial Inclusion Programme (PFIP) – a joint programme of the UN Capital Development Fund (UNCDF) and United Nations Development Programme (UNDP) and partner to the Bank of PNG for the development of the country’s 1st National Strategy on Financial Inclusion.
Financial inclusion in PNG has received active support from the national government, resulting in a diverse range of service providers, financial products and delivery channels. Together, the five mobile money providers count over 360,000 registered users since the opening of the mobile money market in 2011. Growing at an annual rate of 202 percent since 2008, the number of financial services' agents now surpasses bank branches in the country.
However, several significant barriers persist to fully include low-income households in the formal financial sector. The high costs of serving poor customers relative to the revenues generated by small transactions and balances, the high costs of building a distribution system to acquire and serve low-income customers, and a lack of products and services tailored to the needs of low-income customers deprive individuals, families and communities of the socio-economic benefits associated with financial inclusion. The unbanked segment currently stands at 85.62 percent of the total population with the Highland Region having the highest percentage at 91.92 percent, followed by the Momase Region at 82.30 percent.
In August 2013, the Bank of PNG, with technical and financial assistance from the Pacific Financial Inclusion Program (PFIP) convened stakeholders to build on the priorities for financial inclusion in the National Informal Economic Policy 2011. The country established targets for 2014 and 2015 that formed the basis for PNG’s commitments to the Maya Declaration on Financial Inclusion made at the September 2013 Alliance for Financial Inclusion Global Policy Forum. PNG aims to reach one million more unbanked low-income people, of which fifty percent of people reached will be women, by December 2015, and the National Financial Inclusion and Financial Literacy Strategy 2014-2015 provides the implementation and monitoring framework for the sector.
PFIP is a joint programme of the UN Capital Development Fund (UNCDF) and United Nations Development Programme (UNDP) with additional funding support from Australian Government Aid and the European Union/Africa, Caribbean and Pacific Microfinance Framework Programme (EU/ACP).