May 22, 2014
Welcome and Acknowledgements
MR. Peter Varghese, SECRETARY OF THE AUSTRALIAN DEPARTMENT OF FOREIGN AFFAIRS AND TRADE
Ms. Osnat Lubrani, UN Resident Coordinator for the Fiji Multi country office and Resident Representative for UNDP
Acting Governor Barry Whiteside of the Reserve Bank of Fiji
Mr. Robin Yarrow, Chairman of the National Financial Inclusion Task Force
Members of the diplomatic corps
Other distinguished guests
I am Reuben Summerlin, Programme Manager for the Pacific Financial Inclusion Programme, or PFIP, and it is my pleasure to welcome you all to this launch of PFIP’s 2nd phase.
I should begin of course by thanking some very important stakeholders. I say some, because I could honestly spend the whole programme thanking the many people who have contributed to PFIP and our financial inclusion efforts—but don’t worry, I won’t:
Firstly to the Australian Government, more specifically to the Department of Foreign Affairs and Trade, as we are here to celebrate the signing of a cooperative agreement renewing their funding and our partnership for PFIP 2.
Also to our other donor partners: the EU and the New Zealand Aid Programme; The United Nations Development Programme, the UN Capital Development Fund, founding partners of PFIP
I’d also like to thank the National Financial Inclusion Taskforce of Fiji, which is the national coordinating group made up many of our partners here in Fiji, but is also representative of our partners across the region. I know that Robin Yarrow will share with you some of this group’s remarkable accomplishments over the past few years
Thanks are also in order for our regional partners who are not able to be here tonight, in particular the central banks: BPNG, CBSI, RBV, NRBT, CBS
Reserve Bank of Fiji
Most of you here this evening are well familiar with PFIP, but please allow me to briefly describe the programme for those who may be less familiar with it. PFIP is a Pacific-wide programme helping to provide sustainable financial services, to low income households while at the same time working to increase financial competency in the region.
PFIP was created in 2008 to bring new energy and ideas on financial inclusion to the Pacific. Its strategy has been to seek out and introduce new ways of serving hard-to-reach populations, and to foster greater commitment and cooperation among regional stakeholders to building inclusive financial systems throughout the Pacific. PFIP targeted the six largest markets in the Pacific region, where 90% of the unbanked population are located: Fiji, Papua New Guinea, Samoa, Solomon Islands, Tonga and Vanuatu.
The financial inclusion landscape in the Pacific has changed dramatically since 2008. Though PFIP cannot claim involvement in all of the changes and successes, Allow me to share a little “then and now” comparison with you highlighting some of the changes we consider ourselves lucky to have played a role in:
In 2008: Most PICs lacked defined strategies, regulations and policies focussing on financial inclusion
As of Today:
Fiji, SOI, Vanuatu and PNG have national financial inclusion strategies in place. And not to give anything away: Solomon Islands is one of two countries that has achieved its targets ahead of schedule.
Regulators in PNG, Fiji, Samoa, SOI, Vanuatu have developed and are implementing inclusive insurance action plans
5 PICs have introduced KYC protocols based on proportional risk making it easier for low income and rural people to open bank accounts—and there are many other examples of improvements to the legal and policy framework that have been made or are in progress that I could mention if there were more time.
In 2008: There was a general lack of stakeholder coordination on financial inclusion & little knowledge generation, exchange and dissemination within the region
As of Today:
There are National Financial Inclusion Taskforces coordinating FI efforts in 3 countries (Fiji, SOI, Vanuatu), and a Centre for Excellence in Financial Inclusion doing the same in PNG.
The Pacific Island Working Group of the Alliance for Financial Inclusion provides our regional central banks a forum to jointly tackle financial inclusion challenges, compare progress and share lessons learned not only in the Pacific, but around the world
Regional learning events organised on inclusive insurance, financial performance monitoring, remittances, G2P, agent banking and financial literacy
Wealth of published research on Financial Services Sectors in the Pacific, including reports on credit unions, microinsurance demand, financial diaries of low income households
In 2008: No PICs had service providers offering low cost, technology-enabled banking solutions
As of Today:
11 mobile/branchless banking pilots implemented across 6 PICs, some in collaboration with IFC & ADB
Some 600,000 clients across the Pacific have access to new financial services through PFIP-supported partner, more than 380,000 of whom have accessed new savings accounts in regulated FI
Inclusive insurance products have been piloted in 3 PICs targeting low-income people
Low-cost international remittances services to mobile wallets were introduced Fiji, Samoa, Tonga
First G2P electronic banking pilot in the region
In 2008: Little focus of governments and service providers on building financial competencies of low-income households in the region
As of Today:
There are financial literacy strategies in Fiji, Papua New Guinea, Solomon Island and Samoa
Adult financial competency baseline prepared for 4 counties, and a replicable methodology to measure adult financial competency in the others
Financial education has been introduced into in school curriculum in two countries
Let me also say that while these are exciting advancements, there is definitely more to do, in fact, the results today should be viewed as a good beginning. Because, despite these promising developments in financial inclusion over the past five years, the Pacific continues to be one of the least-banked regions in the world. In some Pacific countries it is estimated that less than 10% of the population have access to basic financial services. (i.e. savings, credit, insurance, remittances, transfers, pensions and investments) from either regulated or non-regulated financial institutions. And as the financially excluded they are not able to achieve their full economic potential and continue to be denied opportunities to attain a productive and dignified living.
So what will PFIP 2 do?
Continue working with regulators to achieve Better Policies, Regulations and Coordinated Actions to enable safe expansion of the financial sector:
We will work to Deepen financial access through product/ channel innovations that meet the financial service needs of low-income Pacific islanders, including women and youth
We’ll focus on increasing sector understanding of market niches and business models so that financial institutions can reach down-market in a sustainable way
Work to strengthen financial competencies of people so that they can better leverage new financial access opportunities to improve their lives
Greater emphasis on results based measurement, improved monitoring and evaluation, and moving from strictly measuring access to financial to measuring quality and usage of services.
Working with our current stakeholders to embed financial inclusion into the national development agenda—in order to expand government commitment and bring greater human and financial resources to bear on remaining challenges.
Increasing activity in Vanuatu, Samoa and Tonga, while exploring the option of expanding to LDC outside of PFIP’s current portfolio potentially including Kiribati/Tuvalu.
And for those of you who like numbers: some of our targets include
Additional 500,000 low-income people, with at least 50% women, gain access to appropriate/affordable financial services
Additional 150,000 previously unbanked people, with at least 50% women, gain access to a formal savings account
Three additional PICs have national inclusion and financial literacy strategies in place. Countries with strategies that are three or more years old review and update their strategies
Three additional PICs offer financial education through core curricula
Clearly challenges remaining to making the Pacific “Financially Inclusive.” But on behalf of PFIP, I’d like to say that we are grateful for the opportunity to build on our phase one success and we look forward to earning the trust that you have shown in your support.
Thank you, Vinaka Vakalevu.