January 18, 2017

Ladies and Gentlemen, it is my pleasure to address you all at this celebration event marking UNCDF’s 50th Anniversary. I would like to begin by congratulating UNCDF on reaching this milestone.

As Head of Delegation for the European Union (EU), we have had the pleasure of working with UNCDF’s flagship programme, the Pacific Financial Inclusion Programme (or PFIP) since 2008. Over this time, much headway has been made in the area of financial inclusion in Papua New Guinea.

From 2014, EU has been working closely with PFIP as part of the second four-year phase of the Rural Economic Development Programme (RED 2), with the overall objective of contributing to improving livelihoods of people living in rural areas of Papua New Guinea.

PFIP’s involvement with RED 2 is to deliver the crucial component of access to financial services for the agricultural value chain, with the objective of increasing financial inclusion for the low-income segment in the Highlands Region and to foster improved relations within value chain players through better access to finance. This objective resonates well with PFIP’s overall goal of increasing the number of low-income customers who adopt formal financial services across the Pacific region.

I am pleased to report the progress that PFIP has achieved over the first half of the RED 2 programme. PFIP has already made significant in-roads into the following key areas: (1) supporting the development of microinsurance and microleasing through partnerships with BIMA, MiBank and Capital Insurance; (2) deepening access to mobile and branchless banking appropriate for low-income rural populations with a robust project pipeline including Westpac in-store banking; (3) creating a generation of financially competent Papua New Guineans through financial education and literacy programs with a pilot financial education project at Kamaliki Technical and vocational centre; and (4) engaging with communities in the Highlands regions through the technical college and the PNG National Agricultural Research Institute.

PFIP operates on the cutting edge of financial inclusion. Driven by a firm belief that customer engagement is key to successful financial service deployments, PFIP is pursuing an ‘innovation lab’ approach, driving digital financial services for underbanked populations such as the remote areas of the Highlands region that prove extremely difficult for traditional financial services to access. PFIP does this by catalysing financial service providers to focus on improving the customer experience, value proposition and ultimately adoption of financial services. PFIP’s new approach revolves around extensive field trials and prototype field testing.

I would like to highlight a couple of PFIP’s key achievements thus far under the RED 2 programme.

Governor Loi Bakani has already mentioned PFIP’s involvement with BIMA in promoting low-cost mobile insurance coverage targeted at low-income communities. This has resulted in almost 90,000 Highlanders being covered by life and health insurance, the majority of whom have never previously had insurance coverage. Considering insurance is mostly taken out by breadwinners to reduce the financial burden on their families in case of their death or hospitalization, and that the average Papua New Guinean household has five members, we can infer that almost half a million Highlanders (or almost 16% of the Highlands population) are in fact benefitting from this one innovative product.

Another pilot project underway we are very excited about is the MiBank ‘pay-as-you-go’ solar energy loan pilot.  The product is essentially micro-leasing, as households will pay off loans on their phones via the MiCash digital payment platform incrementally over 2 years, after which they will own the solar kit and receive free electricity. As mentioned by the Governor, according to a 2014 joint IFC and World Bank report, 82% of the PNG population remains unconnected to the electricity grid, a large proportion of which is concentrated in the Highlands region. The MiBank partnership offers a tangible improvement to quality of life for low-income households who are otherwise unable to afford purchasing solar energy kits, whilst also familiarizing them with formal financial services.


PFIP also has an ambitious project pipeline under development.


One upcoming project the EU are very enthusiastic about is PFIP’s new partnership with Westpac PNG, currently in development, to enhance the usage of in-store (agent) and mobile banking channels in the Highlands region. This project will target small-scale farming communities in the rural Highlands, for whom traditional banking infrastructure has been largely out of reach, and will extend basic banking services to customers beyond its branch and ATM locations. PFIP and Westpac have initiated the project on developing financial services that will inspire PNG highlanders to adopt financial services to manage improve their daily financial lives.


Another notable potential upcoming project worth mentioning follows on from market research work that PFIP undertook in partnership with Capital Insurance, assessing the viability of insuring community assets such as church properties, schools and medical centres. This novel concept has the potential to cover over 2,700 schools & 50 churches, safeguarding community members from the financial shocks associated with having to contribute towards new infrastructure in event of a catastrophe.

In summary, the EU are very supportive of PFIP’s efforts in advancing lasting financial inclusion, particularly in the Highlands region of Papua New Guinea. We look forward to seeing what UNCDF is able to achieve over the remaining two years of the RED 2 program, and more broadly over PFIP’s remaining second phase. I once again extend my warm greetings and best wishes to UNCDF on its 50th anniversary and look forward to many more decades of excellent contribution to financial inclusion in the developing world.