June 2, 2010
About 109,000 households in Fiji miss out on savings, credit and other financial services. The untapped savings demand, largely present in the rural areas, stands at least FJD $70 million dollars. Further, the unmet demand for credit, mainly present in the urban areas, is at least FJD $57 million dollars and there are over 130,000 Fijians who could benefit from insurance products in the short term.
These findings are contained in the report Fiji Financial Services Sector Assessment released today by the Pacific Financial Inclusion Programme (PFIP). The report is based on a field research conducted last year by the Basix Group, a premier provider of microfinance services and promoter of sustainable livelihoods in India.
The report highlights that compared to other Pacific Island countries, the financial sector in Fiji is well developed, with a broad range of services provided by the commercial banks, non bank financial institutions, credit institutions, insurance companies and microfinance institutions. However, the report points out that “the banking sector’s physical presence, products and services are largely designed to serve the business sector, government, expatriates, the wealthy and the salaried urban population .” At the same time, there are still missed opportunities to provide better financial services to more Fiji Islanders and there is a strong need to ensure better financial awareness and capacity building.
Fiji has an infrastructure that is favourable towards the microfinance, which can adequately serve the untapped markets, the report states. The broad network of Automatic Teller Machines (ATMs), point of sale (POS) devices a real time payment system and credit bureau form part of this infrastructure. Fiji’s legal and regulatory environment, increasingly sophisticated and affordable telecommunications services as well the Reserve Bank of Fiji’s keen interest in promoting microfinance are all ingredients that can make microfinance more accessible to the people of Fiji.
Till Bruett, manager of the Pacific Financial Inclusion Programme, commented that “this report was overtaken by recent events, including the pending entry of banks into the microfinance market and Vodafone’s launch of its M-PAiSA project.” He noted that discussion around financial inclusion in Fiji has advanced significantly since the research was done in May of last year, particularly due to the creation of the National Financial Inclusion Task Force (NFIT). “We still believe this document provides a solid departure point for anyone trying to reach more of the unbanked with appropriate and affordable financial services.”
The report further highlights the lack of appropriate products and retail institutions to deliver them as one of the main obstacles to microfinance services in Fiji. The report provides suggestions on how to overcome these hurdles.
Source: Scoop Media