February 7, 2017
FINANCIAL literacy is the ability to understand and act when faced with a financial decision and the Pacific Financial Inclusion Programme has worked with four central banks and departments of statistics to measure financial competency and develop a national financial competency baseline.
In response to questions sent to PFIP on their work in the field of financial inclusion it said in these four countries, households identified key competencies that they needed to have/know/be able to do to interact successfully with the money economy.
According to the organisation, through the national studies, it was identified that the majority of households have low functional financial literacy.
In Fiji, of the 13 key financial competencies developed, low income households were able to demonstrate strong capabilities with only one of the 13 key competencies.
The competencies were also assessed according to age, gender, location and ethnicity (refer below).
As a result, the financial education in schools’ intervention was viewed as one type of national response to this problem.
PFIP says financial inclusion is the delivery of quality and relevant financial services at an affordable cost to individuals and households, with the issue of access to financial services complemented by the issue of usage of financial services.
Financial literacy on the other hand, is all the tools and learning which help and equip an individual with the skills to make responsible financial decisions.
The organisation has implemented and is running several programs which try to improve financial literacy among the people in the region and their programs have been very successful.
According to PFIP, up to September 2016, 1.1 million Pacific Islanders have accessed financial services through the help of the PFIP.
It said PFIP had provided performance-based grants to 10 financial service providers and technical assistance to six policy makers with the primary countries of focus of the PFIP being Fiji, Papua New Guinea (PNG), Samoa, Solomon Islands, Tonga and Vanuatu.
PFIP communications associate Erica Lee said the grants had helped to increase the services of existing financial service providers to low income and rural dwellers and had also funded research and studies on financial inclusion, demand side surveys, digital financial services and consumer protection.
She said the first phase of PFIP ended in June 2014 and under phase 1, the program set out to attain 500,000 people accessing formal financial services.
Ms Lee said the program significantly surpassed this objective, reaching 687,620 underserved Pacific Islanders and engaging policy makers across the region in a campaign to formalise financial inclusion policy.
Meanwhile, phase 2, which began in mid-2014, PFIP has assisted 433,761 access financial services (of whom 177603 are women), which means that that halfway through the program’s second phase, PFIP had already achieved 87 per cent of its five-year overall program objective of reaching another 500,000 Pacific Islanders.
According to PFIP, in Fiji, PFIP was instrumental in assisting the Fijian Government in introducing a groundbreaking platform for social welfare payments, marking a shift from voucher-based payments to electronic transfer to a bank account, benefiting about 33,000 recipients.
It said funds have since reached welfare recipients in a timelier and cost-effective manner and provided recipients with a secure place to save.
This was the first Government-to-Person (G2P) electronic payment initiative in the Pacific.
PFIP has also helped BIMA (a world leader in mobile micro-insurance), reach more customers through a grant of more than $US500,000 ($F1 million) to establish an office in Mount Hagen in the highlands region in Papua New Guinea and to substantially increase its number of agents there.
This led to 267, 381 clients signing on to life and hospitalisation insurance which amounted to 640,269 policies since June 2014.
PFIP also supported BIMA in opening a “Pacific hub” — a call centre from which it intends to serve five countries.
In Fiji, since its soft launch in mid-2016, BIMA was able to sign up 6991 clients in Fiji with amounting to 13, 682 policies.
Building off the outstanding success of BIMA’s work in PNG, many people in the Pacific will have access to affordable insurance plans for the first time through the new Pacific Hub.
These new microinsurance products have managed to do away with the usual lengthy paperwork processes, preliminary health checks and identification associated with some traditional insurance products.
Subscription via text message (through digicel platform) leads to enrolment and periodic insurance premiums are set up for automatic, deductions.
PFIP has received a few entries from Fiji and PNG. So far, our Facebook advert reached close to 100,000 people with more than 400 reshares.
“We have had many queries and a lot of discussion by young people about the theme ‘Growing financial inclusion’.
“Overall the feedback has been very positive and we expect to see some great images by the closing date 28th February,” she said.
PFIP has a few interesting projects in the pipeline — new financial services that you can expect to see rolled out over the next couple of months.
PFIP will be using its innovation lab to test new products specifically for women and agriculture.
“We are in talks with banks and mobile network operators to launch new innovative services.
“We are also working on better uptake of insurance in the Pacific and hopefully will see some bundled insurance products for Fiji.”
Financial behavioural change is a long-tailed activity.
It is envisaged through Financial Literacy efforts, including financial education in schools, that people will become better equipped with the financial knowledge and skills overtime.
Source: Fiji Times