July 21, 2017
Port Vila, Vanuatu – Representative of various Government Ministries in Vanuatu were introduced to the benefits and business case for the digitization of government payments to its citizens.
The Reserve Bank of Vanuatu (RBV) has partnered with the Pacific Financial Inclusion Programme to hold a one-day introductory course on Wednesday to discuss the various payment flows that could be made digital.
Government-to-Person (G2P) payments are the digitization of government payments to citizens such as social transfers as well as wage and pension payments.
PFIP Deputy Programme Manager and training facilitator, Krishnan Narasimhan said that G2P payments has the potential to become a vehicle for extending financial inclusion and improving the welfare of poor people.
He added that by shifting to digital channels for its payments such as social, salary, procurement payments, taxation and licensing, the Vanuatu Government can reduce costs, increase efficiency and transparency and broaden familiarity with digital payments by its citizens.
“G2P flows builds in part on the progress made by the industry and the regulators to grow the branchless banking industry. It creates an enabling environment for the private sector to further its person-to-person payments (P2P) which in turn will develop a long-term business case,” he said.
He added that in 2011, PFIP through the financial support of the Australian Government was instrumental in assisting the Fijian Government with the digitization of 25,000 social welfare recipients who were largely unbanked. This transition to digital payments freed up four months of staff time processing payments and saved over FJD $150,000, some of which was from leakage.
A consumer survey conducted by PFIP last year on the demand for financial services in Vanuatu found that 32% of Ni-Vanuatu adults are completely excluded from financial services while only 37% of Ni-Vanuatu adults have a bank account.
The Financial Services Demand Side Survey (DSS) Report for Vanuatu also reported that the median adult in Malampa must travel up to 60 minutes to reach a bank branch, costing 600 Vatu (USD $5.50), the highest figure across Vanuatu.
G2P can help reach a large part of the unbanked population by encouraging the use of formal financial services. Recipients will also benefit from quick payments, reduced traveling time and costs.
PFIP has also been conducting stakeholder consultations to assist the RBV in developing Vanuatu’s first financial inclusion strategy.
PFIP is a Pacific-wide programme that has helped 1.5 million low-income Pacific islanders gain access to financial services and financial education. It achieves these results by funding innovation with financial services and delivery channels, supporting policy and regulatory initiatives, and empowering consumers.
PFIP operates from the UNDP Pacific Office in Suva, Fiji and has offices in Papua New Guinea, Samoa and Solomon Islands. It is jointly administered by the UN Capital Development Fund (UNCDF) and the United Nations Development Programme (UNDP) and receives funding from the Australian Government, the European Union and the New Zealand Government.
For more information or media inquiries please contact:
Erica Lee – Communications Associate