The Pacific Financial Inclusion Programme (PFIP) released a comparative report on the Financial Services Demand Side Surveys (DSS) of Fiji, Solomon Islands and Samoa this week.
The report titled Benchmarking financial inclusion in Fiji, Samoa, and Solomon Islands: Findings from the first national demand side surveys, presents a synthesis and comparison across the three surveys.
In late 2014 and early 2015, demand side surveys were held in Fiji, Samoa and Solomon Islands. These surveys were jointly supported by (PFIP) and the Alliance for Financial Inclusion (AFI). The surveys were led in-country by the Central Banks of the three countries with the assistance of their respective National Bureaus of Statistics.
Policymakers and regulators worldwide face a common challenge when encouraging and monitoring the growth of financial inclusion: good data is hard to come by. This is especially true in the Pacific region, where gathering data in areas with low population density spread over large distances is physically challenging and costly.
Despite passionate and goal-oriented central banks with mandates for financial inclusion, policymakers were operating largely in a data vacuum when making big policy decisions. The Demand Side Survey (DSS) initiative is an important first step in the journey to incorporate data into policymaking and evaluation, by providing evidence-based color and depth to the understanding of financial access and usage in the Pacific.
The first round of DSS surveys reveal that Fijians, Solomon Islanders and Samoans have rich, varied, and active financial lives.
The key findings of the report show common areas for improvement across the three countries:
- Distance and cost to financial access points is prohibitive to financial inclusion, particularly for rural and unbanked individuals;
- Other barriers, such as lack of knowledge of access points or requirements of usage, are likely suppressing uptake of financial services as well;
- Agricultural and casual income earners, along with younger adults, are more likely to be financially excluded;
- Reducing the gap in formal financial services for women must be a policy priority in Fiji and Solomon Islands;
- Remittances provide opportunities to extend financial services; and
- Further research must uncover the barriers to uptake and usage of mobile money in the region.
The study noted a strong savings culture, with 61% of Samoan adults to 87% of Solomon Islander adults having saved in the past year. While a large proportion of Fijian and Samoans savers are formally banked, Solomon Islanders save informally due to low access to formal financial services (only 26% of adults are banked). These adults save at home, or by giving money to others, either to safeguard for them or as loans that they intend to recover.
We observe that remittances account for important financial flows in the region, especially in Samoa, and opportunities remain to capitalize on remittance transactions to offer innovative and appropriate financial services.
And despite stark differences in bank account access among men and women in Fiji and the Solomon Islands, these differences diminish when we consider formal and informal financial services; men and women use informal financial services at equal rates.
How, then, can women and other financially excluded adults, who appear to be active money managers in other respects, be brought into the fold of formal financial services?
This report outlines the barriers to formal financial access, as unearthed by the DSS surveys, along with questions for further research. The synthesis report and comprehensive country reports point to puzzles which still require answers and innovation solutions, but they also unveil areas of new opportunities for growth.
This is an exciting time for financial inclusion in the Pacific, with policymakers, financial service providers, and other interested stakeholders making concerted efforts to ensure appropriate and relevant products for Pacific Islanders.
We hope that the DSS results will help to further this momentum.
PFIP will be undertaking similar DSS surveys in Vanuatu and Tonga later this year.
PFIP is a Pacific-wide programme helping low-income households gain access to quality and affordable financial services and financial education. It is jointly managed by the United Nations Capital Development Fund (UNCDF) and the United Nations Development Programme (UNDP) and receives funding from the Australian Government, the European Union and the New Zealand Government.
PFIP aims to add one million Pacific Islanders to the formal financial sector by 2019 by spearheading policy and regulatory initiatives, facilitating access to appropriate financial services and delivery channels and by strengthening financial competencies and consumer empowerment.
PFIP operates from the UNDP Pacific Centre in Suva, Fiji and has offices in Papua New Guinea, Samoa and Solomon Islands.