May 3, 2017
Honiara, Solomon Islands – A new pilot savings scheme focused on providing retirement savings plans for self-employed Solomon Islanders was launched yesterday at the Honiara Central Market.
Market Vendors were the first registrants of the new product youSave being trialed by the Solomon Islands National Provident Fund (NPF) through technical support and a USD $176,820 grant from the Pacific Financial Inclusion Programme (PFIP). PFIP also provided 20 android tablets to enable real-time registration of customers.
Traditionally, NPF account holders have been formally employed citizens whose employers have created an account for them. Under the new scheme, self-employed citizens can register and begin saving in the voluntary superannuation scheme, earning an attractive interest rate, which has averaged 8% over the past 10 years. Unlike a commercial bank savings account, NPF does not charge any account fees, meaning that the account holder accumulates more savings over the long haul.
“The youSave product gives all Solomon Islanders the opportunity to save for their retirement and have access to great investment returns at a higher interest rate than normal commercial banks,” said NPF General Manager Tony Makabo.
The NPF will be working with various associations and organisations to offer the scheme to their members in the coming months. One such group is the Honiara Central Market Vendors Association whose 375 members are the first group to participate in the pilot. The Vendors Association President Moreen Sariki welcomed the initiative saying that her members were eager to join.
“We are grateful for the opportunity for our members to save and see our money grow through investment,” she said.
PFIP Financial Inclusion Specialist Mr. Isaac Holly said “Having enough money to maintain their quality of life during retirement and not being a burden on loved ones is a big concern for many in the informal sector in the Solomon Islands. Even saving small amounts with youSave can add up to substantial savings. For example, if a 35-year-old contributes SBD10 per week, by the time they reach 55 they could have around SBD25,000 in today’s dollars saved, equivalent to more than 4 years’ median income per capita.”
“A key feature of the scheme is that it also has the flexibility for members to withdraw up to 50% of their savings for any reason, so it is also a very attractive and easy to use savings scheme,” he added.
Currently, the product is only offered in Honiara through the NPF offices and Post Offices. It is expected that once the pilot has proven successful; the scheme will be rolled out nationwide and will be connected to mobile banking.
youSave is offered to Solomon Islanders between the ages of 16 – 51 who are self-employed. An individual can sign up and begin saving by registering with various forms of identification and a $50 deposit.
The product has two components. Every dollar deposited into the youSave account gets split between two accounts:
Each time a deposit is made, the product will send the account holder a text message to update them on their account balance.
The account has a maximum contribution of $100,000 a year.
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