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Government Engagement: The Next Chapter in PNG’s Financial Inclusion Story

On April 25, 2023, the Centre for Excellence in Financial Inclusion (CEFI) and the Bank of Papua New Guinea (BPNG) launched the National Financial Inclusion Strategy 2023-2027 (NFIS). The strategy is the third installment after the National Financial Inclusion and Financial Literacy Strategy 2014-2015 and the National Financial Inclusion Strategy 2016-2020. The two earlier strategies primarily focused on reducing the huge financial exclusion level in Papua New Guinea (PNG), that was at one stage considered to be one of the highest in the South Pacific region and the world. Fortunately, this level has seen a sizeable reduction to somewhere between 75 to 80% thanks to the ongoing efforts and leadership of BPNG and CEFI. Since the introduction of the first strategy in 2014 until the fourth quarter of 2023, 4 million bank deposit accounts have been opened. Within this same period 16,094 access points (ATMs, EFTPOS, bank branches and bank agents) have been established. Transactions using mobile phone banking and other digital platforms have also seen a substantial increase, as depicted by the total number of mobile financial services accounts in the table below showing the Financial Inclusion Data for 2023.

These are impressive numbers no doubt. However, the battle is far from over as a good chunk of PNG’s population is still financially excluded.

The new strategy aims to use these earlier successes as a stepping stone to make further strides to expand financial inclusion in the country. Similar to its predecessors, the new strategy recognizes the important role of financial institutions. The signing of the Institutional Commitment of Measurable Inclusion Targets (I-COMMIT) agreement by the heads of the various commercial banks, microbanks, and savings and loans societies with the BPNG Governor, signifies this. Besides the financial institutions, the successes of the two previous strategies also demonstrated the important role of the government in driving the financial inclusion agenda. For instance, BPNG-led initiatives such as the Financial Inclusion Exposition and the Young Minds Savings Campaign, including research and reform, paved the way for the financial inclusion agenda to have wider recognition. Events such as the Financial Inclusion Exposition and Young Minds Savings Campaign brought the public, school kids, and the banks together to exchange information and ideas. Some of these initiatives were groundbreaking in their own right despite very little to no government support. Nonetheless, for these initiatives to deepen financial inclusion and widen its impact, focus should now turn to provinces and districts where the bulk of the people are said to be “financially excluded.” To reach these people, it is impossible for financial institutions, BPNG, and CEFI to do it alone. They need the government to come on board and provide the enabling infrastructure and socio-economic environment. This is the challenge facing the current strategy.

Source: 2023 Access & Usage Points (CEFI, 2024), https://www.thecefi.org/fi-data-quarterly-reports-2/.

Once the government is on board, initiatives such as the financial inclusion expos and the young minds savings campaigns can be spearheaded by the government, preferably at the sub-national level. Thus, these activities can be featured on the government workplan and budget. The message here is that financial inclusion should not be an agenda exclusively left to BPNG, CEFI, or banks for that matter, to address. Rather, it needs to be embraced by the entire government machinery given that it is a cross-cutting issue that underpins the modern economy that PNG aspires to become.

As the lead implementing agency of the NFIS in PNG, CEFI has already embarked on forging partnerships with provincial governments via its Provincial Government Engagement program. The program will be implemented through a three-phased approach. The first phase will be mainly focused on advocacy and awareness raising where the main outcome will be the signing of the memorandum of understanding (MOU) between CEFI and the provincial government. The second phase will be primarily focused on implementing key programs and activities to promote financial inclusion. Key activities include the rollout of financial literacy trainings, financial inclusion expositions, young minds savings campaigns, carrying out relevant surveys, account opening, onboarding of bank agents, set-up of ATMs and EFTPOS, and the digitization of the payment system to assist with the effective delivery of services. The last phase is where evaluation and impact assessment will be carried out to assess the impact of these interventions.

The program is still in its infancy stage, but some good progress has already been made. CEFI has signed MOUs with West New Britain Province (WNB), East New Britain Province (ENB), Milne Bay Province, Western Highlands Province, New Ireland Province, and Kerema, which has become the first district in the country. Of the five provinces, WNB and Milne Bay are leading the way. They are followed closely by ENB. For these provinces, progress has been made in setting up a provincial steering committee to guide and provide oversight on the rollout of financial inclusion initiatives in their provinces. The committees in these three provinces are chaired by deputy provincial administrators. At the technical level, the respective commerce division has appointed an officer to act as a focal point to coordinate financial inclusion activities in the province. With these mechanisms in place, several financial literacy trainings have already been conducted for both trainers and the community at large. In the case of ENB, almost all the districts in the provinces have had financial literacy trainings conducted. The next step will be to undertake regular monitoring and impact assessments to measure the impact of these trainings in the communities. Seeing the importance of this program, WNB Provincial Government has already extended its partnership by another three years while Milne Bay Provincial Government is working towards renewing its partnership. To recognize provincial governments who have been championing financial inclusion initiatives in their province, CEFI and BPNG plans to award the best performing province under its Financial Inclusion Excellence Awards. These awards are expected to be unveiled this year during the inaugural Annual Dialogue Forum to be hosted by CEFI.

Looking ahead, CEFI plans to sign on more provinces until the whole of Papua New Guinea is covered. While this is a must and a commendable goal, achieving it will require not just the banks and development partners, but essentially national and sub-national government to work with CEFI and the Bank of Papua New Guinea. After all, expanding financial inclusion to all the provinces and districts is fulfilling the nation’s Vision 2050.

Article by Busa Jeremiah Wenogo

Mr. Wenogo is a development economist whose interest covers informal economy, SME, and financial inclusion. He is employed by the Centre for Excellence in Financial Inclusion (CEFI) as the manager in charge of its Special Projects Unit. The Unit is taking the lead in advancing partnership between CEFI and the provincial government and district authorities. Prior to this, for almost a decade, he was at the forefront of policy and legislative work around the informal economy in PNG while working with the PNG Consultative Implementation & Monitoring Council.

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CEFI partner’s with Aflatoun to deliver financial education for school children in Papua New Guinea

The Centre for Excellence in Financial Inclusion (CEFI) has partnered with Aflatoun International to deliver financial education for children and young people in Papua New Guinea.

Both CEFI and Aflatoun signed a virtual Memorandum of Understanding (MoU) on Tuesday May 14 which will see both organization working together in partnership to achieve the objectives and goals of the MoU.

Aflatoun an international organization works with a strong network of Non-Government Organization and governments to deliver social and financial education to millions of children and youths in the most effective way possible around the world.

Executive Director Mr. Saliya Ranasinghe when giving a brief back ground on CEFI told Aflatoun CEO Mr. Roeland Monasch that financial literacy has been a forefront of CEFI’s activities as it was an entry point for financial inclusion in the country.

Mr. Ranasinghe further stated that CEFI has reached over 250,000 people in the country with its Financial Literacy Training  and Training of Trainers programs and the results has seen over a thousand certified trainers specialized in training financial literacy training or adult training.

He said CEFI’s recent partnership with the Department of Education to introduce financial education into school curriculum will further strengthen the partnership with Aflatoun to deliver financial education for children in PNG schools.

Mr. Ranasinghe also announced that CEFI’s Financial Inclusion and Capacity Development Manager, Jill Pijui and three officers from the Department of Education will attend Aflatoun’s annual conference on financial education in Cebu, Philippines later this year.

CEO Mr. Roeland Monasch said Aflatoun was thrilled to work with CEFI to assist and facilitate the delivering of financial education in the country.

“I’m very excited to discuss and sign this partnership with you today (Tuesday May 14). At Aflatoun we strongly believe that children, young people and youths need to learn about finance as soon as possible,” Mr. Monasch said.

“We like the approach to work with you in a way where we can assist, facilitate, but you (CEFI) are in the driver’s seat, that’s very important.”Mr. Monasch stressed.

“We provide content and help local contextualization, but it’s the organizations on the ground who know what’s needed, who know what is appropriate, who need to take the lead and are in the driving seat to  facilitate, that financial education should facilitate towards financial inclusion,” he added.

The overall goal of the MoU is to build a collaboration between CEFI and Aflatoun International which both parties agree to;

  • Rely on the mutual desire to apply the principles of the Universal Declaration of Human Rights and the UN Convention on the Rights of Child
  • Work together to advocate for the need of social and financial education for children and young people
  • Collaborate to develop social and financial education for children and young people in Papua New Guinea

 

To ensure the achievement of the goals, the parties agree to join forces in the following areas.

  • Supporting the development of a social and financial education programme for children and young people in Papua New Guinea
  • Exchanging of educational materials on Social and Financial Education as well as contacts
  • Planning for concrete collaboration and activities on the basis of an annual action plan agreed upon by both parties
  • Developing (contextualized) curricular and methodological content for Social and Financial Education based on Aflatoun International curricula
  • Training of trainers and educational pedagogical workers
  • Monitoring and evaluating the effectiveness of social and financial education of children and young people
  • Cooperate in exchanging and promoting best practices and experiences in the field of social and financial education

 

Photo caption: CEFI Executive Director signing the MoU document during the brief virtual signing ceremony with Aflatoun CEO Mr. Roeland Monasch.

 

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Two new partners join Market for Village Farmers Project

Two new partners in the Market for Village Farmers (MVF) Project have been encouraged to change the mindset of farming communities driven by farming activities.

CEFI’s Executive Director Mr. Saliya Ranasinghe said this during MoU signings between CEFI and Gentrade Consultancy Services and Southern Consultancy (Enterprising) Services on May 08.

“You are very important partners in this endeavor and I want to reiterate that you have to maintain very high standards and deliver the quality service,” Mr. Ranasinghe said.

“Change the mindset of the people in your community and the change will come through opening of a bank account or submitting a loan proposal to a bank,” Mr. Ranasinghe told the owners of the two consultancy services providers.

Mr. Ranasinghe emphasized the MVF project as one of CEFI’s key initiatives and partners adding it was a unique agriculture project that aimed to get the banks involved in agriculture lending with the focus on value chain of the fresh produce sector.

The MoU agreement is for Village Farmers Livelihood Improvement Training under MVF project and is funded by International Food Agency Development Authority and executed by Department of Agriculture and Livestock and Implemented by Fresh Produce Development Authority.

The MoU aims to improve the livelihoods of village farming households in target provinces and by facilitating the transition from semi-subsistence agriculture to market oriented production and farming as a business.

The project’s target provinces are Western Highlands, Jiwaka, Simbu, Eastern Highlands, Morobe and East New Britain.

Gentrade Consultatncy Services and Southern Consultancy (Enterprising) Services as part of their engagement will provide the following deliverables;

-Provide qualified male and female trainers (10 each)

-Ensure selected trainers fully participate in the Village Farmers Livelihood Improvement (VFLI) ToT Training and are certified

-Provide VFLI training

-Plan and coordinate movements of trainers and provide reports

MVF Project Manager, Mr. Joe Koima, who was present to witness the signing, thanked CEFI for the continued partnership  and added that training the farmers is key to developing the fresh produce sector.

“This partnership between the lead partners is important because the ratio between trainers to farmers is very low. This partnership with CEFI through the training partners will increase the ratio leading to more outreach in financial inclusion trainers,” Mr. Koima said.

Mr. Koima encouraged CEFI to increase its financial literacy programs in the near future to cover more centers in the country as this provides the leverage for development.

Mr. Wesley Lopele, Gentrade Consultancy Services and and Mr. Tony Walega, Southern Enterprises Services, both thanked CEFI for the opportunity to be engaged as training partners in the MVF project.

“We (Southern Enterprises Services) are looking forward to working with CEFI and MVF and are eager to make our involvement a success,” Mr Walega said.

“We have been waiting for this opportunity and thank CEFI for choosing us on merit as one of the training partners for this project,” added Mr. Lopele of Gentrade Consultancy Services.

 

Photo caption: CEFI Executive Director Mr. Saliya Ranasinghe (middle) signing the MoU document with the two new partners in MVF Project.

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Papua New Guineans to be educated in stock markets following MoU signing between CEFI and Securities Commission PNG

Papua New Guineans will be educated on investing in stock markets following a Memorandum of Understanding (MoU) signing between CEFI and Securities Commission of PNG (SCPNG).

The lack of knowledge in this area has seen many Papua New Guinean’s making unwise decision to invest in ponzi schemes and throwing away their hard earned money to this schemers who make a quick return from unsuspecting financial illiterate customers.

The need to educate Papua New Guineans on making real investments in stock equity markets has urged SCPNG to embark on this journey.

The SCPNG Acting Chairman Mr. Joshua James and CEFI Executive Director Mr. Saliya Ranasinghe signed the MoU on Wednesday May 08, which will see both organizations working in collaboration and partnership in carrying out the programs initiated by CEFI.

The programs include, Young Minds Savings Campaign, Provincial Government Engagement Program, Training of Trainers to train investor and Development of Capital Marketing Modules.

“We (SCPNG) want to drive this concept to the schools and partner with CEFI and invest in the education program so that schools are able to teach the young children about investing and making the right choices,” said Mr. James Joshua, SCPNG Acting Chairman.

“We also need to drive that out to the public and make them clear on which are the right avenues to invest and get a real return out of it.

“That is our agenda that we want to expand the investment options and investment tools that are currently on our market.

“Thank you CEFI, we need partners like you to drive the agenda forward,” Mr. Joshua added.

Mr. Ranasinghe thanked SCPNG for coming onboard and agreeing to terms of the MoU, which he said highlighted the importance of their partnership which is to implement the programs.

“People need to be educated in investment and we are looking forward to working with you (SCPNG) to develop a training module and deliver to the people of this country,” Mr. Ranasinghe added.

The MoU will run for three years from May 8 2024 to May 08 2027.

 

Photo caption: CEFI Executive Director Mr. Saliya Ranasinghe (left) and SCPNG Acting Chairman Mr. Joshua James signing the MoU.

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