Great Steps Forward for Financial Inclusion in Solomon Islands

December 10, 2010

[Honiara, Solomon Islands – November 22] On November 18th a collaborative workshop for Financial Inclusion in Solomon Islands was officially opened by The Minister of Finance, Gordon Darcy Lilo. The two day workshop was attended by over 80 participants, representing the government, the private sector, civil society organizations, women’s organizations, and donor agencies.
 
The Central Bank of Solomon Islands (CBSI), and The Pacific Financial Inclusion Programme (PFIP) co-sponsored the event, which was designed to formulate a coordinated plan to increase access to financial services for the approximately 80% of Solomon Islanders who still do not currently have access to them.
“Financial services are the lifeblood of the economy”, stated Minister Lilo, observing that access to these services needs to improve in order to include more Solomon Islanders in the economic development of the nation.
The first day of the conference was dedicated to learning about the benefits of financial services, their current state of development, and opportunities to improve them. PFIP Project Manager, Tillman Bruett, explained, “Financial services are demanded by almost everyone around the world. Even very low income people have a need to manage their day to day expenses, as well as accumulate large lump sums of money to pay for things like school fees and medical supplies”.

To date, many different efforts have been made to extend these benefits to the 80% of the population that lives in rural areas. Most, like the rural credit union movement and the Development Bank of Solomon Islands, reached large scales with the support of subsidies and then sharply declined. Therefore the focus of the discussion was on providing a greater outreach of these services, and products that are better designed to the needs of people in these areas, using models that will not depend on external subsidies.

CBSI Governor, Denton Rarawa, expanded the scope of the discussion calling for participants to not only consider low income people but also to consider the greater population including those living in urban areas. He encouraged those present to “think outside the box” to suggest innovative new technologies and models that might offer solutions. A popular response was to use the churches to promote and provide financial services, because of their large networks and convening power in many communities.

Dr. Alice Pollard, also showcased the work she was doing to provide basic financial services to women in Southern Malaita, and it was highlighted that many women, even in Honiara, still lack the ability to access basic financial services.

The PFIP team choose three areas of potential opportunity to present to those gathered, which included offering banking services over the mobile phone, educating people in financial literacy, and developing community based financial models that can exist on their own in rural parts of the country that are otherwise hard to service. JoepRoest, of PFIP noted, that “with the rapidly improving telecom networks in the country a huge potential is now available to offer other value added services over those networks, like salary payments for rural professionals, money transfers to people back in the villages, and small savings products”.

The second day was dedicated to prioritising initiatives into an action agenda, on which stakeholders will focus from now until 2014. CBSI was nominated the spearhead the implementation of the action agenda, and monitor the progress towards it. They officially accepted this role for the first two years of the agenda. Once the action plan is finalized it will be circulated, and a task force will be formulated by CBSI to approve and implement it.

All presentations given at the event, plus the report presented on the status of financial services are available on the PFIP website at: http://www.pfip.org/publications/presentations/

PFIP is funded by the UN Capital Development Fund (UNCDF), European Union (EU), The Australian Agency for International Development (AusAID) and the United Nations Development Programme (UNDP) and operates from the UNDP Pacific Centre.

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