The Pacific Financial Competence Studies are products of PFIP’s Knowledge Sharing initiative which seeks to enhance sector understanding on products, channels business models, and needs of low-income Pacific islanders through demand, supply and impact evaluation studies.
Knowledge on financial competence is needed by governments, Central Banks, and key development actors in the Pacific to develop a targeted Financial Literacy Strategy. Previously, these institutions lacked information on the ability of low-income households to manage money and use financial services.
As a guideline for measuring financial competence, PFIP developed the Minimum Adult Financial Competency Framework for Low Income Households in Pacific Island Countries. Its purpose is to develop an understanding of financial activities the household needs to be able to engage in the economy successfully. The competency framework was developed from research undertaken earlier in Fiji and the Solomon Islands. PFIP has undertaken studies measuring financial competence in Samoa, Fiji, Solomon Islands and Papua New Guinea.
The Pacific Financial Competence Studies have sought to define the set of financial activities low income households do to effectively manage household finances and measure the success adults who make financial decisions on behalf of their household are able to perform those activities.
While there are differences between countries, there is a consistent pattern of financial competence: