It’s after 2 o’clock in the afternoon and a group of women from Etil (a village 20 minutes from Port Vila) gather around 54-year-old matriarch, Wakalani Alphonse.
© 2019 UNCDF John Rae
She sits on a straw mat grating a large pile of tapioca as she instructs each woman on their tasks for the afternoon. Wakalani has taken stock of the root crops, key ingredients like salt, sugar and flour and the number of freshly caught fish. She has decided that the menu for Monday will be some of Vanuatu’s favourites’: laplap, tuluk and simboro. All three dishes contain grated root crops like breadfruit, banana, taro or yam, slowly cooked on an outdoor wood stove in rich coconut cream and wrapped in local spinach. To go with this, there will be crispy fried fish, some fresh fruits and juice.
All the local produce they are cooking has been sourced from their community gardens and the fish caught by the village men at a creek just a 10-minute walk from Etil. There is enough food to make about 10 food packs.
The women have a stall by the roadside and here workers returning home from their jobs in Port Vila will stop by from 3pm to purchase the packs. Depending on the time of the week, the group may make more or less food packs by judging their customers buying trends and pay day. Each pack sells for 200 vatu and the group can earn between 1,500 to 3,000 vatu a day. Earnings from the stall is divided equally among the women after a small portion has been put aside to purchase a stock of ingredients at the nearest store.
The group is made up of around 20 women and was formed in 1997 by Wakalani after retiring from formal employment in the tourism industry. Wakalani says she wanted to create a space where women could share the workload of maintaining community gardens, child care, share ideas and to be a platform for their economic empowerment.
Saving for retirement
Recently, the group has also been a great example of women’s financial inclusion. Each of them has opened a bank account and a voluntary pension account with the Vanuatu National Provident Fund (VNPF). Wakalani says the women are happy that they have been given the opportunity to become members of VNPF.
“We are glad the VNPF finally recognizes that most of our people are part of the informal sector, we too should be allowed to save for a secured retirement. I like the fact that my voluntary account does not have any fees, earns annual interest and would be difficult for me to withdraw my savings,” she said.
The VNPF converted Wakalani’s account from her previous formal employment to a voluntary account. She is now able to continue to saving into that account having not contributed anything since 1997 when she retired. Next year she turns 65 and will be able to access her funds.
Twenty-three-year-old Lari Alphonse, a mother of two said she had already contributed 2,000 Vatu to her new pension account as of May this year. “I want to save for my children’s future. I found the process very simple and I am glad that VNPF can to come to Etil to collect my contributions every Friday.
Piloting micropension in Vanuatu
Funded by the Governments of Australia and New Zealand and with technical support from the Pacific Financial Inclusion Programme (PFIP), a feasibility study was conducted in October 2018 to determine whether self-employed ni-Vanuatu can and are willing to contribute to a voluntary pension scheme.
Following positive responses, a small pilot project was launched in January 2019 using a similar model PFIP deployed in Solomon Islands. A dedicated team was set up by VNPF to create awareness on the trial product. Every day they travel around Efate Island visiting communities like Etil to sign up new voluntary members and to collect their contributions.
So far over 350 ni-Vanuatu around select centres in Efate Island have opened voluntary accounts; these include smallholder farmers, fishers, casual workers, market vendors, taxi and bus drivers and other informal sector workers. Interestingly, most of the accounts have been opened by women. In May 2019, the total contributions collected stood at VT 432,933.
While the onboarding process for the pilot is very much a manual and labour-intensive exercise, VNPF has been able to prove that there is a clear demand for a micropension product. When given access to financial services tailored to their needs, the ni-Vanuatu have shown to be recurring eager savers.
However, to effectively scale and market the new voluntary pension product, changes will need to be made to the VNPF platforms to improve the customer experience and reduce the operational costs to make it a financially sustainable product. Furthermore, the governing legislation of VNPF will need to be amended, as currently it does not recognize the informal sector. For that reason, the VNPF board has written a policy paper suggesting changes to be made to the VNPF Act to allow for the recognition of the informal sector. These amendments will be tabled in parliament later this year.
When all sectors of the economy are included in the financial system, most notably the informal sector, which makes up about 80 percent of the working population in Vanuatu, it creates a foundation for inclusive economic growth that in turn supports Vanuatu to achieve the Sustainable Development Goals (SDGs).
PFIP is jointly administered by the United Nations Capital Development Fund (UNCDF) and the United Nations Development Programme (UNDP) and receives funding from the Governments of Australia, New Zealand and the European Union.