February 7, 2012
Co-chairs from Reserve Bank of Fiji and Central Bank of Samoa led attendees through a three-day agenda that included topics such as mobile financial services, consumer protection, and microsavings. The group meeting opened with remarks from BNPG Governor Loi Bakani, in which he reiterated the organization’s proactive stance to help drive financial incision in the country and region, a core part of the country’s medium-term and 2050 economic development strategy to reduce poverty. Governor Bakani also briefed the other central bank leaders on PNG’s new national center for financial inclusion and forthcoming national financial inclusion task force.
Following opening remarks, a discussion ensued, including Governor Bakani and facilitated by Mr. Joep Roest of the Pacific Financial Inclusion Program (PFIP), on the future of mobile financial services. Though mobile financial services have been rolled out in most Pacific Island countries and are beginning to show a stable client base, the group looked ahead to try and identify key challenges for scaling them up and impacting the unbanked. It was agreed that members would continue to monitor key developments, including the expanding role and function of agents in the mobile financial services delivery chain, and the ability for people to send and receive international remittances via mobile phones.
PIWG members also participated in a full-day workshop on consumer empowerment and market conduct, with Mr. Gabriel Davel, the former head of the South African credit regulator and current AFI Associate. The workshop commenced with an overview of international standards on consumer protection and discussion on how they relate and apply to the situation in the Pacific. This was followed by an interactive discussion on the role of the regulator, and the options available, in helping to balance the playing field and ensure fair conditions for private sector players as well as the individual clients. The group concluded that a more empowered and protected client base will contribute to a better functioning and more stable financial situation and, based on these findings, prioritized key activities for 2012 — research into current consumer protection legal infrastructure in place and the identification of key issues now and into the future as more Pacific Islanders enter the formal financial system. The group will work together to create a series of templates for forms and disclosure requirements that can be used across the Pacific, and will with AFI’s global Consumer Empowerment and Market Conduct Working Group for guidance on redress mechanisms.
Being located in Papua New Guinea, meeting attendees had the opportunity to learn more about the largest MFI and non-bank financial services market in the region. Mr. Boas Irima, Manager, Banks and Finance Companies from BPNGbriefed his peers in the group on BPNGs approach to regulation and supervision of this sector. This was followed by a visit to Nationwide Microbank to take a closer look at their operations, including savings and loan offerings tailor-made for low income clients, and innovative KYC procedures using digital photography and signatures.
As a result of the meeting, PIWG finalized its 2012 workplan which includes the consumer protection related priorities previously mentioned, along with a region-wide financial inclusion data project, and monitoring progress in the areas of mobile financial services and national financial inclusion strategy development in the Pacific region.
PIWG was formed upon the request of the governors of six central banks in the region – Fiji, Samoa, Solomon Islands, Vanuatu, Papua New Guinea and Timor Leste. The group shares similar financial inclusion barriers, including a very high unbanked rate, geographically dispersed islands with low density populations, and challenges related to physical and banking infrastructure