Financial Inclusion in the Pacific Goes Global

July 30, 2010

M-banking, accessing financial services over the mobile phone, is one of the cutting edge developments in the field of financial inclusion, and burgeoning developments in the Pacific are now being watched by practitioners around the world.

At the Boulder Institute of Microfinance in Turin, Italy, Mike McCaffrey, Technical Specialist with the Pacific Financial Inclusion Programme (PFIP) gave a presentation on initiatives in the Pacific to 325 microfinance practitioners from over 85 countries. In his presentation, “M-money in the Middle of the Ocean”, he explained, “When most people think about the Pacific, they picture a paradise of tropical islands, but what does not occur to them are the challenges the fragmented geography presents for providing low cost access to financial services. For this reason, PFIP has supported the development of mobile phone based technologies that can provide financial services to people around the Pacific at very low costs.”

In Kenya over ten million people are already using their mobile phones to make payments and transfer money on a system called M-Pesa run by the mobile network operator Safaricom. In order to offer customers a greater array of financial services, Safaricom has recently partnered with Equity Bank to launch M-Kesho. Representatives from Equity Bank explained how this partnership allowed Kenyans to earn interest on their deposits made over their mobile phones, and even access financial products like microcredit and microinsurance.

The presentation was facilitated by Martin Holtmann, Head of Microfinance at the International Finance Corporation (IFC), and Tim Lyman, Senior Policy Analyst at CGAP, explained the importance of flexible regulation to m-money’s development. The presentation was designed to highlight both the diversity of environments in which this product is making an impact, and the growing sophistication of the financial services being offered over mobile phones.

Also attending the Boulder Institute of Microfinance are representatives from Central Banks in Papua New Guinea, Fiji, Samoa, Vanuatu, and Solomon Islands. They include Owen Kose (Bank of Papua New Guinea), Iosefo Bourne (Central Bank of Samoa), Noel Vari (Reserve Bank of Vanuatu), Neumi Usumaki (Reserve Bank of Fiji), Raynold Moveni(Central Bank of Solomon Islands). Representatives of two microfinance institutions – Lavenia Baro (Fiji Council of Social Services Microfinance Unit) and Dorinda Work (Microfinance West, Lautoka) – are also attending the Boulder Institute of Microfinance. They have been supported by grants from the European Union and PFIP to learn more about designing regulation that preserves the financial security of their countries, while creating an enabling environment for extending financial services to low income and rural populations.