MICROCAPITAL BRIEF: Tonga Development Bank Launches 'Ave Pa'anga Pau Digital Remittance Product via Regional Australia Bank

The International Finance Corporation (IFC), a member of the World Bank Group; the Tonga Development Bank (TDB), which is subsidized by the government of New Zealand; and the member-owned Regional Australia Bank recently released ‘Ave Pa’anga Pau, a product allowing Tongans residing in Australia to send remittances to individuals in their home country using their mobile phones. Recipients may direct their funds to a TDB bank account or pick up their cash in person at a TDB branch. ‘Ave Pa’anga Pau costs 5-percent per transaction, which is reportedly half the cost of comparable services in the region.

“Remittances are of great importance to the economy of Tonga and ‘Ave Pa’anga Pau is an important cog in helping lift prosperity for our people. Remittances not only help families, but also provide a boost to the economy, with the money often being used to start a small business, helping to create jobs,” said Prime Minister Pohiva Tu’i’onetoa of Tonga.

Founded in 1977, TDB is a financial services provider that reported total assets of USD 145 million as of the close of its 2018 fiscal year.

Founded in 1969, Regional Australia Bank reported total assets of AUD 2.34 billion (USD 1.7 billion) at the close of its 2019 fiscal year.

IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of June 2020, it reported total assets of USD 96 billion.

The World Bank Group is a multilateral organization whose two overarching goals are to promote shared prosperity and end extreme poverty by 2030. With 189 member nations as of 2020, the group encompasses: (1) the International Development Association and the International Bank for Reconstruction and Development, which make up the World Bank; (2) IFC; (3) the Multilateral Investment Guarantee Agency; and (4) the International Centre for Settlement of Investment Disputes. During the year ending June 2019, the World Bank Group disbursed a total of USD 62.3 billion in loans, grants, equity investments, and guarantees to partner countries and private businesses.

By Kate Finster, Research Associate

Sources and Additional Resources

‘Ave Pa’anga Pau homepage
https://www.avepaanga.co.nz/

IFC press release
https://pressroom.ifc.org/all/pages/PressDetail.aspx?ID=26060

Tonga Development Bank homepage
https://www.tdb.to

Tonga Development Bank 2018 annual report
https://asset.tdb.to/files/PDF/AnnualReport2018English1.pdf

Regional Australia Bank 2019 annual report
https://www.regionalaustraliabank.com.au/about-us/corporate-documents/reports/annual-reports/annual-report-2020

Previous MicroCapital article on ‘Ave Pa’anga Pau
https://www.microcapital.org/microcapital-brief-tonga-development-bank-launches-ave-paanga-pau-digital-remittance-product-via-regional-australia-bank/

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