The launch of a new mobile money service in the Solomon Islands, known as M-Selen, has the potential to herald in a new era of financial and digital inclusion in the South Pacific archipelago.

Launched in June 2023 by the country’s largest telecommunications provider, Our Telekom, with support from the UN Capital Development Fund (UNCDF) and the Government of Australia, M-Selen aims to bring basic financial services to the fingertips of everyday Solomon Islanders.

Access to financial services has long been a challenge for the country’s 700,000 people. GSMA data shows that only 25% of the population own a bank account, while 35% of the country relies on informal financial services, such as money lenders, and 31% have no access at all.

M-Selen is one powerful tool with the potential to improve the situation by, among other things, reducing the cost of access to financial services, said the Governor of the Central Bank of Solomon Islands, Dr Luke Forau, while launching the platform in Honiara.

A key aim of the service is to reduce the digital divide in Solomon Islands, that is largely, but not exclusively, driven by the country’s challenging geographic conditions.

With smartphone ownership growing in the country, the National Financial Inclusion Strategy - 3 of the Solomon Islands (2021-2025) has placed an increased focus on boosting access to digital financial services, since ATMs and physical bank branches are not readily available in rural areas.

While it’s still early days, there is optimism among users and agents that M-Selen will increase access to services, reduce transaction costs, and improve efficiency. It is also an innovative savings tool for unbanked and underserved communities, a significant function given the limited access to banking services across the Solomon Islands.

But the success of M-Selen, the stakeholders say, will depend on how all stakeholders contend with the challenges typical in small markets like Solomon Islands, including low transaction volumes and the lack of use cases.

UNCDF canvassed the views of these stakeholders to assess how the service has been received, and what areas need to be further refined to offer new features to consumers and improve access to financial products and services in the country.

Those interviewed include three M-Selen users, and one of the platform's Master Agents, Honiara-based Pacific Digital Solutions Limited, whose role is to support OurTelekom with the onboarding of customers and agents around the country.

There is a growing sense of opportunity among the users, with the more industrious among them already leveraging the platform for entrepreneurial activity. There is also a growing demand for additional features to be added to the platform, such as retail payments, to further strengthen the viability and sustainability of M-Selen.

The Master Agent, Nathaniel Dawheya, on the other hand, feels that more public education and awareness is needed to foster greater acceptance of the platform and cement its place as an alternative payments and saving tool in the country.

Lisa Puhahu, 25, Honiara (user)

For Ms Puhahu, the impact of mobile money has already been transformative. Her story is an example of how the platform can reshape the landscape of digital and financial inclusion in Solomon Islands, through a bottom-up approach that prioritizes the last-mile.

Ms Puhahu was among the first users to sign up for M-Selen, enticed by its promise to provide convenient access to financial services, such as being able to quickly send and receive money.

For Ms Puhahu, the safety of not having to carry cash and being able to send money to her family in the village quickly and securely are the biggest attractions for using the service.

“I feel safer storing and sending money through M-Selen, rather than putting money in the bank," she said.

“It’s good for people who live in the villages too, because they don’t have access to any banks and it’s easy to send them money from here [Honiara].”

Ann-Lise Tarai, 34, Guadalcanal (user)

Ms Tarai, lives and works as a Finance Officer in Honiara, and frequently sends money to her family living in rural Guadalcanal some 40 kilometres away.

As an early adopter of M-Selen, Ms Tarai said she is impressed by the ease with which she is able to use the app’s innovative features.

The convenience of M-Selen is empowering individuals like Ms Tarai to become financial lifelines for their families, without the need to make arduous and expensive trips to remote areas.

She now uses the service to send money to her relatives regularly and efficiently, which helps her maintain and strengthen familial bonds and better manage her time and money.

"M-Selen has brought my family closer, and I no longer worry about the hassle of sending money. It's instant and hassle-free, and I can feel the smiles on my family's faces when they receive the much-needed support,” she said.

Ms Tarai hopes to see new features, such as bank to mobile wallet transfers and the ability to send and receive remittances from family and friends living abroad, added to M-Selen in due course.

Unice Kelivani, 51, Honiara (user)

Ms Kelivani is an entrepreneur who has embraced M-Selen as a tool to provide her customers with additional payment options based on their needs and convenience and improve efficiencies in her own business.

She was introduced to the service three months ago and now uses it daily to send and receive money.

“The app is very fast and convenient and I feel safe using it because OurTelekom is a trusted company,” Ms Kelivani said.

As an early M-Selen user, the potential of expanding her business using mobile money was not lost on her. Ms Kelivani is a garment trader by profession, but M-Selen has allowed her to diversify into selling mobile top up cards.

“M-Selen is good for Solomon Islands, especially for those living in rural areas. It has has brought us peace of mind," she said.

Nathaniel Dawheya, Master Agent/Managing Director, Pacific Digital Solutions Limited

Mr Dawheya’s pivotal role includes onboarding and managing mobile money agents and educating users across the country about the benefits of M-Selen.

His company's work in building a network of mobile money agents and a strong user base is essential for the growth and sustainability of M-Selen.

Despite some early challenges, including some potential users not possessing valid identification documents, Mr Dawhey said the app has immense potential to bring financial services to underserved communities.

He pointed to the platform's simple registration process that “takes one minute” as an example of how they are targeting the financially excluded who need to access these services the most.

"For a customer to register as an M-Selen user, all they need is to have an existing phone, an OurTelekom sim card and a valid ID," he said.

"Not everyone is walking around with an ID, and those people can always provide confirmation or reference letters and we are looking at how to improve this further."

Overall, Mr Dawheya sees M-Selen as a much-needed service for Solomon Islands and his company alone aims to onboard 4,000 users by the end of 2023.

To date, M-SELEN has onboarded more than 20,000 users and more than 250 agents nationwide. Building a reliable agent network remains a critical focus for M-SELEN this year to ensure service availability and access.

In addition to basic services such as cash-in, cash-out , and money transfer, M-SELEN has recently introduced utility bill payments and is promoting digital payments in the retail space through the introduction of merchant payments.

Inward foreign remittance will also remain a key service, given the increasing number of Solomon Islanders working abroad.