Remarks by Judith Karl, UNCDF Executive Secretary on the occasion of the HFC Agency Banking Launch in Fiji

March 30, 2017

 

20170411_UN_headshot_22It is my pleasure to address you at this ‘Innovation Hub’ event to mark the launch of HFC Bank’s agency banking channel, in partnership with Vodafone Fiji and with financial support from the Pacific Financial Inclusion Programme.

Together with UNDP, the United Nations Capital Development helps implement the Pacific Financial Inclusion Programme, thanks to generous funding from the Australian Government’s Department of Foreign Affairs and Trade, the European Union, and the New Zealand Government’s Ministry of Foreign Affairs and Trade.

On behalf of the Pacific Financial Inclusion Programme, I congratulate HFC Bank on this exciting initiative.

I am informed about HFC’s consistent efforts to provide innovative and competitive financial solutions to its customers over its 55-year history, first as a home finance company and for the last three years as a bank. Allow me also to wish HFC all the success in its journey ahead to continue extending the reach to underserved men and women with the various financial services they need to improve their lives.

Agency banking is a potential game-changer for financial inclusion in Fiji. It will bring huge convenience to HFC Bank customers by allowing them to make transactions from their bank accounts using Vodafone M-PAiSA, either via their mobile phones or through Vodafone point of service machines available in more than 1,000 outlets around the country.

Most exciting of all is the potential that agency banking offers to include remote, rural, and often low income, communities in formal financial services through mobile phones.  This is possible because of the extensiveness of Vodafone’s established network and the M-PAiSA mobile wallet. A significant portion of Fiji’s rural and maritime population remain under-served by financial services, with a 2015 nationally representative Demand Side Survey finding that more than half of rural adults do not have bank accounts, compared with just one-quarter of urban adults. 

I understand that this partnership has the potential to bring digital financial services to about 66,000 people, a large proportion of whom includes rural women and youth. So this is a hugely exciting step forward in addressing this challenge.

This matters because being included in the formal financial sector through bank accounts or other formal services enables people to improve their livelihoods. It allows people to manage better their household cash flows; to build assets and save money to send kids to school or pay for health care; to finance microenterprises or small businesses so they can grow; and to use savings or insurance to limit the impact of financial shocks caused by natural disasters or a sickness in the family. More broadly, financial inclusion can help reduce extreme poverty and help mobilize savings from under people’s mattresses and put them into productive circulation.

UNCDF has been present in Fiji through the Pacific Financial Inclusion Programme since 2008. The programme’s objective is to increase the number of low-income customers who adopt formal financial services in the region. Its projects support policy and regulatory initiatives; fund financial services innovation; promote alternative delivery channels; gather data and disseminate market information; and empower consumers.

PFIP achieves this by working closely with Central Banks, government ministries, and financial service providers in Fiji, Papua New Guinea, Samoa, Solomon Islands, Tonga, and Vanuatu. As of the end of last year, financial service providers support by the Pacific Financial Inclusion Programme had enrolled over 1.5 million Pacific Islanders, including over 730,000 women.

In Fiji alone, Pacific Financial Inclusion Programme partnerships have led to over 525,000 clients receiving financial services, including bank accounts, microinsurance, and mobile money.

The Pacific Financial Inclusion Programme has been working with the Fijian Government and its partners in areas such as inclusive insurance, reviewing consumer credit legislation, and identifying opportunities for the digitization of Government payments.  It is also partnering with the Fiji National Provident Fund in piloting a micro pension scheme for the informal sector following a feasibility study completed last year.

UNCDF stands ready to work with the Government and Reserve Bank, and all our partners, such as HFC Bank, so that together we can reach Fijians with affordable and appropriate financial services. And that is why we are so excited to have supported the launch of this new agency banking service.

Once again, I commend HFC Bank for launching this new service. UNCDF looks forward to working with you and our other partners to extend the reach of financial services in Fiji and indeed across the Pacific.