The Bank of Papua New Guinea (BPNG), the nation’s central bank, the Pacific Financial Inclusion Program (PFIP), a UN-sponsored initiative that provides financial services to poor people, and the Centre for Excellence in Financial Inclusion (CEFI), a coordinating entity for financial inclusion strategies in the country, met in August 2013 to discuss extending financial inclusion to 1.6 million unbanked and underbanked Papua New Guineans, of which 50 percent are low income women, by 2015. The National Informal Economic Policy, a governmental policy that seeks to develop Papua New Guinea’s informal economy and its formal financial services, will implement policies discussed in the workshop in an effort to meet this goal.
Papua New Guinea’s National Postal Service (Post PNG) as well as an unspecified number of banks and other non-bank financial institutions agreed to the goal, for which policies will be implemented in 2014 and 2015. Stakeholders discussed six categories of the program:
(1) Financial education and literacy- leaders agreed to increase financial education by integrating money management skills into school curriculums, which reportedly will help foster a sustainable Papua New Guinean economy.
(2) Consumer protection and market conduct- representatives established the need to ensure low-income consumer financial protection in order to make this sector more active in the economy.
(3) Rural, branchless and mobile banking- representatives discussed ideas to mitigate the challenges of providing services in the country’s difficult geographical terrain.
(4) Research and data- practitioners will aim to use research and data analysis to properly disperse financial services in the country.
(5) Integration of financial inclusion into local and national governments- representatives plan to do this by increasing cross-communication between various government, provincial and district departments to better implement financial inclusion and literacy across the nation.
(6) Financing of microenterprises- representatives placed critical importance on facilitating and increasing lending to informal businesses in the area.
The workshop aimed to develop new strategies and expand upon current policies. The National Informal Economy Policy was initiated in 2011 and aims to increase economic activity, the number of producers, incomes, consumption and investment of the lower- and middle-income Papua New Guinean population for the years 2011-2015.
In 2011, BPNG reported total assets of PGK 30.1 billion (USD 13.9 billion), deposits of PGK 18.1 billion (USD 8.37 billion) and a gross loan portfolio of PGK 8.7 billion (USD 4.0 billion). The number of depositors is unavailable. As of July 2013, PFIP conducted operations in seven countries. Financial data on the organization is not available. Financial information for CEFI is also unavailable.
By Adrija Vaiciulionis, Research Associate
About Bank of Papua New Guinea (BPNG):
Established in 1973, the Bank of Papua New Guinea (BPNG) is the nation’s central banking authority. The core responsibilities of BPNG are to ensure the stability of the nation’s financial sector as well as the economy as a whole. In the year 2011, BPNG had total assets of PGK 30.1 billion (USD 13.9 billion), deposits of PGK 18.1 billion (USD 8.37 billion) and a gross loan portfolio of PGK 8.7 billion (USD 4.0 billion). The number of depositors is unavailable.
About the Pacific Financial Inclusion Program (PFIP):
The Pacific Financial Inclusion Program (PFIP) is a United Nations sponsored initiative established in 2004, which works to extend sustainable financial services to poor Pacific islanders who have limited or no access to banks. It was established with funding from the United Nations Capital Development Fund, the European Union and the United Nations Development Program. As of July 2013, PFIP has operations in seven countries. Financial data on the organization is not available.
About Centre for Excellence in Financial Inclusion (CEFI):
Centre for Excellence in Financial Inclusion (CEFI) is designed to coordinate and facilitate all financial inclusion strategies in Papua New Guinea and acts as an information exchange for the microfinance sector. CEFI works in conjunction with the Bank of Papua New Guinea. Financial information for CEFI is unavailable.
About National Informal Economy Policy:
The National Informal Economy Policy was adopted in 2011 to increase economic activity in the general population of Papua New Guinea. Reportedly, it aims to increase the number of producers, incomes, consumption and investment of the lower- and middle-income Papua New Guinean population. The policy has two “arms of action” to achieve its goals. The first is to provide greater access to formal financial services. As of April 2013, only 15 percent of the population had access to formal financial services. The second arm of action is for the government to provide facilities and services to train the informal economy and to provide essential goods and services in rural and urban areas in order to increase productivity.
Sources and Additional Resources:
Press Release, Pacific Financial Inclusion Program: “Financial Service Providers Commit to Bank 1.6 Million More Unbanked and Underserved Papua New Guineans by the End of 2015, of which 50 Percent will be Low-Income Women,”
http://www.pfip.org/media-centre/press-releases/financial-service-providers-commit-to-bank-16-million-more-unbanked-underserved-papua-new-guineans-by-end-of-2015-of-which-50-percent-will-be-low-income-women.html
The Department for Community Development, and the Institute of National Affairs. “National Informal Economy Policy (2011-2015),” microfinancegateway.org,
http://www.microfinancegateway.org/gm/document-1.9.50811/National%20policy,%20Informal%20economy.pdf
MicroCapital Article, August 3, 2013, “MICROCAPITAL BRIEF: “ Financial Diaries Project” Preliminary Readings: Low-Income People in Papua New Guinea Travel Long Distances for Financial Transactions,” https://www.microcapital.org/microcapital-brief-financial-diaries-project-preliminary-readings-low-income-people-in-papua-new-guinea-travel-long-distances-for-financial-transactions/
MicroCapital Article, June 30, 2010, “MICROCAPITAL BRIEF: International Finance Corporation (IFC) and IFC Capitalization Fund Agree to Invest $140m in Bank South Pacific (BSP) of Papua New Guinea to Extend Financial Services in Pacific Islands,”
https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-and-ifc-capitalization-fund-agree-to-invest-140m-in-bank-south-pacific-bsp-of-papua-new-guinea-to-extend-financial-services-in-pacific-is/
MicroCapital Universe Profile: Bank of Papua New Guinea (BPNG)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bank+of+Papua+New+Guinea+%28BPNG%29
MicroCapital Universe Profile: Pacific Financial Inclusion Program (PFIP)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Pacific+Financial+Inclusion+Program+%28PFIP%29
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