Provincial Government Engagement Roll-out Program- Embedding financial inclusion in the province

• Provincial Financial Inclusion Roll-out Strategy

Introduction & Background

The role of government in financial inclusion as outlined in the National Financial Inclusion Policy(NFIP) and National Financial Inclusion Strategy 2016-2020(NFIS) is to set policy goals, set the rules (through regulation) and address market failures where justified. The Government Departments which have a stake in financial inclusion are the Department of National Planning & Monitoring, the Department of Community Development & Religion, Department of Treasury, the Department of Finance, the Department of Education, the Department of Provincial & Local Governments Affairs, the Department of Agriculture & Livestock and sub-national government (Provincial and District Administrations)

Financial inclusion is an agenda that is part of and contributes in many ways towards accomplishing their respective policy objectives and the grander vision of the National Government as articulated in the Vision 2050, the Marape Manefesto and the Medium Term Development Plans. There is a need to coordinate activities with all the identified stakeholders and, where justified, to provide resources to address market failures which constrain financial inclusion. The NFIS has targeted Government Engagement as a key priority area to address this problem. The specific objective of government engagements is to promote the integration of financial inclusion in the planning and implementation processes of the National and sub-national governments.

Rationale for Government Engagement

The Government Engagement priority area will be implemented by Centre for Excellence in Financial Inclusion (CEFI) with the support of the NFIS Steering Committee. The Government of PNG will be engaged at different levels including Provincial, District, Local Level Government (LLG) and wards. In order to reach the grassroots level, financial inclusion will be promoted through the Provincial Administrations and District Development Authorities(DDAs).

In implementing the NFIS priority area of government engagement, CEFI has established a Special Project Unit to roll out Financial Inclusion activities in selected provinces in PNG. In turn the selected provinces will be required to set-up a desk within the provincial administration to work with CEFI to coordinate all financial inclusion programs and activities in the province.

Objectives for provincial government engagement

The objective of the provincial government engagement is two-fold as outlined below

• To increase financial inclusion activities in the province to support the objectives and goals of the National Financial Inclusion Strategy.
• To include financial inclusion indicators into the annual planning and budgeting process of the province as a development priority

Memorandum of Understanding (MOU)

The tool that will be used to formalise collaboration and partnership between CEFI and the various provincial administrations will be through Memorandum of Understanding (MOUs).

MOUs will be signed between the CEFI and the respective provincial government which will pave the way for both parties to collaboratively roll-out financial inclusion activities in the province. The MOU is expected to be sign by the Governor or the Provincial Administrator with the head of CEFI or BPNG.

In promoting the integration of financial inclusion activities in the planning and implementation processes of each province/district; key priority activities which qualify for government support will be identified and will be included in the Financial Inclusion activity work plan for each province.

It is envisages that the resourcing of the identified activities in the MOU will be done through a cost share arrangement.

The MOU should contain among other things the following key items;

1. Clearly identify the roles and responsibilities of CEFI and the Provincial Government in carrying out FI related activities in the province.

2. For CEFI to implement agreed Financial Inclusion activities and conduct Financial Literacy (FL) and Business Development Services (BDS) training

3.  The conduct a Financial inclusion provincial baseline survey

4. To formalise the cost and resource sharing responsibilities of each party in implementing the financial inclusion activities.

5. Set the timeframe of the MOU to be for three (3) years

6. Apart from the Project Steering Committee to appoint a senior provincial administration officer (most preferably the Director/Advisor for the Commerce Division to the FI Focal point within the provincial government

7. For the Provincial Government through the Project Steering Committee and the FI Provincial Focal Point to recognise and work with the CEFI Financial Inclusion Coordinator

Financial Inclusion Roll-out Plan in the selected provinces.

The following outlines the list of activities that CEFI with embark on with the respective provincial governments. The activities are categorised into phases as follows;

Phase 1: Planning, advocacy and awareness

Phase 2: Implementation

Phase 3: Monitoring and evaluation  

• Phase 1: Planning, advocacy and awareness

Under Phase 1 the following activities will be carried out

1. Sent out formal letters to interested provinces to sought their interest to partner with CEFI to promote financial inclusion in the province.

2. Engage with provincial governments in conferences, seminars and meetings such as PLLSMA and provincial governors, LLG Presidents and administrators conference.

3. Identify donors funded projects operating in the province that has a component on financial inclusion and seek support from the Provincial Government or the donor partner to partner with

4. Establish contact and maintain cordial relationship with key national government agencies such as the Department of Provincial & Local Government Affairs, Department of Finance and Treasury and the Department of National Planning & Monitoring

5. Conduct Financial Inclusion Engagement Workshop with key government stakeholders within the province on the National Financial Inclusion Strategy and current status of the financial activities and obtain consent for partnerships (buy in from the province)

6. Signing of an MOU with the Provincial Government Administration and where required with District Development Authorities to implement financial inclusion activities

7. Establishment of a Steering Committee on Financial Inclusion to be chaired by the appropriate Deputy Provincial Administrator. As chair he/she will be responsible for overseeing the implementation of the Finance Inclusion work plan in the province. Members to be included are key provincial government officials, Private sector agencies (Chamber of Commerce if they are available), financial institutions, Civil society organizations (NGO’s), Church groups (Women and Youth groups that are actively operating). A specific TOR will be created for the Chairperson.

8. Induction for the Provincial Financial Inclusion Steering Committee will conducted to explain the roles of the committees and what is expected under the partnership.

9. Establishment of a Focal Point for coordinating Financial Inclusion activities in the province. The suggestion is for the Director/Advisor Commerce Division to play that role. A specific TOR will be created for the FI Provincial Coordinator.

10. Preparation, finalization and endorsement of the Annual Workplan.

• Phase 2: Implementation 

Under phase 2 the following activities will be carried out

1. Conduct Baseline data on financial inclusion for the province. The survey is to collect baseline data to determine the current financial inclusion situation of each province covering key indicators like access points, demand for financial services, economic activity locations and others. The information gathered from the baseline data collection will assist in the development of Annual Workplans for the province. CEFI’s supply side financial inclusion data and relevant studies conducted in the province will provide the basis for this study.
2. Design and implement an appropriate monitoring and evaluation process/system to measure progress on an ongoing basis.
3. Conduct ToT on Financial Literacy and Business Development Skills for identified key stakeholders such as retired public servants, government officials, youth, women and church leaders and informal micro-entrepreneurs and SME business owners. End of the training trained SME owners need to be linked as a group to BPNG SME accelerator program other support.
4. Conduct Retail Training into the communities with CEFI to provide handholding support in the areas of supervision and coaching and mentoring
5. Develop a database of trained trainers in the province to be jointly administered by the provincial financial inclusion coordinator/focal point and CEFI Training Unit.
6. Opening of Bank Accounts for trained participants
7. Expansion of banking network in the province .i.e. branches, agencies and ATMs.
8. Digitalisation of provincial government payment systems. (CEFI will sought technical assistance for this endeavour)
9. Roll out of children Savings Campaign for the schools – This can be carried out with provincial education department and the regulated financial institutions in the province. CEFI can participate in the initially and then provincial government team can continue with the rest of the schools in the province.
10. Identify and implement Special Projects in the province or selected district as, where and when required (Optional)

• Phase 3: Monitoring & Evaluation

Under phase 3 the following activities will be carried out

1. M & E for the activities (trainings, account opening etc)
2. Ongoing steering committee meetings to be conducted periodically.

• Furnishing of reports

1. CEFI to conduct workshops for Provincial Financial Inclusion Coordinator for upskilling and information exchange.
2. CEFI to provide award for the best performing Provincial Financial Inclusion Coordinator
3. CEFI to develop a training program for the Provincial Financial Inclusion Coordinator and provide them with a good understanding of CEFI activities

• CEFI to conduct a workshop annually for provincial governments to present their achievements
• CEFI to develop a “scorecard” to measure the performance of each province and report back to them.

1. CEFI to provide annual awards for the best performing province.
2. Review of the current MOU

Key performance indicators

Based on the activities listed in phase 1 and 2 the following are the key performance indicators

1. Signed MOU
2. Provincial Financial Inclusion Steering Committee set-up and Chairman appointed
3. Provincial Financial Inclusion Desk set-up and Provincial Financial Inclusion Coordinator appointed
4. Number of trainers trained (gender breakdown)
5. Number of people trained (gender breakdown)
6. Number of new bank accounts opened (gender breakdown)
7. Number of new banking outlets opened
8. Number of ATMs opened
9. % of provincial government transactions conducted digitally

Updates 

• Signed MOUs

Rolling out financial inclusion in provinces and districts is a key mandate for CEFI under the National Financial Inclusion Strategy (NFIS) 2022-2026.  To date CEFI has entered into MOU with Milne Bay, East New Britain, West New Britain and New Ireland Provincial Governments. All 4 provinces have been active as per their responsibilities under the MOU with the establishment of Provincial FI Steering Committees, trainings conducted with coaching and mentoring exercise by CEFI.

Since the signing of the MOUs between CEFI and the Milne Bay, WNB, ENB and New Ireland Provincial Governments the following progress has been made,

• Provincial Government Steering Committees have been set-up in Milne Bay, WNB, ENB & New Ireland Province. The committees are either chaired by a Deputy Administrator or one of the Advisors. CEFI has already developed a TOR to provide guidance to the committees
• Provincial Financial Inclusion Coordinator appointed. So far Milne Bay and WNB have already appointed coordinators on the ground to work with CEFI to promote financial inclusion in the province. CEFI has already developed a TOR to provide guidance to the coordinators on their roles and responsibilities
• Induction of the Steering Committees have already been conducted in Milne Bay and CEFI is planning to conduct induction for both WNB and ENB towards the end of November. The Induction exercise in conducted to ensure that the committee members appreciates financial inclusion as an important agenda for development in their province. Also to make sure that the committee members understand their roles and responsibilities.
• ToT Trainings were conducted in both Milne Bay and WNB Provinces as per the details below;

More work such as linking with PFI’s to bring agent banking and digitizing payment through digital financial services (DFS) is CEFI’s next priority task pending funding request to Treasury Department for 2023 – 2026.

• Financial Literacy Training ToT & Retail Training

Financial Literacy training and Business Essential Skills Trainings is a key derivable under the program. CEFI through the Training Unit will assist in rolling out ToT Trainings and coaching and mentoring sessions. The trained participants are expected to conduct retail trainings in the communities. Trainings have already been delivered in Milne Bay and West New Britain Province as highlighted below. We expect to roll-out similar trainings in the other partner provinces.

• Milne Bay Province

ToT Trainings for Financial Literacy and Business Development Skills were conducted from the 6-10^th of December 2021. A total of 22 participants were trained.i.e. 15 male and 7 female

Retail Trainings were conducted between 19-23^rd September 2022 at Wabumari Village, Suau Rural LLG.  A total of 27 participants took part in the training .i.e. 18 male and 9 female.

Coaching and Mentoring Program were also conducted for four (4) trainers. The program (training and coaching and mentoring program) was carried with support from COOL EARTH GLOBAL and the Commerce and Mines Division of the Milne Bay Provincial Administration. The four trainers were reassessed, coached and mentored using the CEFI Adult Learning Assessment Criteria. COOL EARTH GLOBAL is a charity organization that works alongside rainforest communities to halt deforestation and its impact on climate change and it is currently involved with communities in the Suau LLG. It is also promoting climate friendly economic activities to stimulate economic growth within the communities it is working with.

2.2.2    WNB Province

ToT Trainings were conducted from the 9-13^th August and 16-30^th August. A total of 50 participants were trained .i.e. 21 male and 29 female

Retail Trainings were also conducted by ToT Certified Trainers. The trainings were conducted from 24^th January to 18^th February 2022. A total of 324 participants were trained. i.e 178 males and 146 females. Trainings were conducted in Hoskins LLG, Mosa LLG, Talasea LLG, Kimbe Urban LLG, Bali Vitu LLG, East Nakanai LLG and Central Nakanai LLG.

2.2.3   ENB Province  

CEFI Plans to roll-out Financial Literacy ToT  in four districts starting with Gazelle ,then Rabaul followed Kokopo and lastly in Pomio Districts starting in the last week October to the first week of December 2022.

• Provincial Financial Inclusion Desktop Review

CEFI plans to conduct desktop reviews to establish the financial inclusion status for each of the partner province. The information from the desktop reviews will assist CEFI in developing appropriate interventions in the province to promote financial inclusion in the province.