Increasing access to financial services in the Pacific

October 21, 2015

Suva, FIJI – There have been many promising financial inclusion developments in recent years in the Pacific. Yet, the region continues to be one of the least-banked, not least given the difficulties in serving small, remote, and dispersed populations.

The Pacific Financial Inclusion Programme is one of UNCDF’s flagship initiatives, managed jointly with UNDP. Currently in its second phase, it aims to reach one million low-income Pacific Islanders by 2019. It will do this by supporting policy and regulatory initiatives, facilitating access to appropriate financial services and delivery channels, providing market information, and strengthening financial competencies and consumer empowerment.

Since the Pacific Financial Inclusion Programme began supporting the Central Bank of Solomon Islands efforts to address these and other challenges, and build a more inclusive financial sector, a large numbers of Solomon Islanders have been gaining access to formal banking and payment services. As of December 2014, PFIP reported reaching a cumulative total of 556,000 mobile money subscribers and 390,000 depositors.

As of December 2014, PFIP reported reaching a cumulative total of 556,000 mobile money subscribers and 390,000 depositors in the Solomon Islands.

The Pacific Financial Inclusion Programme has played a catalytic role in the introduction and roll out of electronic banking services, including mobile phone and card-accessed bank accounts. In 2012, for example, UNCDF supported a commercial bank to launch its in-store banking services in the country. This intervention proved to be transformative; the bank now counts 24 in-store banking outlets across eight ‘underbanked’ provinces. This, and other similar performance-based grants, has seen expansion of the banking footprint in the country. 

In Fiji, with UNCDF support, the Pacific Financial Inclusion Programme has supported the Reserve Bank and National Financial Inclusion Task Force in Fiji develop the 2011-2014 financial inclusion strategy and will support the second such strategy too.

PFIP has worked with the Fiji Government to establish successful Government-to-person payment channels with the Department of Social Welfare. This assisted approximately 22,000 welfare recipients in receiving payments through electronic savings account. PFIP also assisted the Reserve Bank in developing enabling policies for mobile network operators to commence mobile financial services.

With PFIP support, Fiji has also integrated financial education into the national curriculum, covering over 900 schools in Fiji. This means nearly 200,000 students from years 1 to 12 are learning about basic financial skills in their classrooms every year. This is a global best practice in youth financial literacy.

SOURCE: UNCDF