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Accessibility Challenges Still Exist in the Region

The region continues to progress on its journey to have financial products and services more widely available but challenges still exist. The Pacific Financial Inclusion Programme (PFIP) was launched nearly
04 Oct 2018 11:00
Accessibility Challenges Still Exist in the Region
Participants during the Pacific Financial Inclusion Programme anniversary celebrations in Suva on October 3, 2018.

The region continues to progress on its journey to have financial products and services more widely available but challenges still exist.

The Pacific Financial Inclusion Programme (PFIP) was launched nearly 10 years ago to help low-income households get access to quality and affordable financial services.

In 2008, the programme found approximately 70 per cent of the region were financially excluded, making the Pacific one of the least banked regions in the world.

This was mainly because financial solutions were too expensive, or not accessible for low-income earners.

There was also little to no financial literacy in many areas – in other words, people did not know how to manage money once they had some.

The figure has improved considerably, but the PFIP says a lot more still needs to be done.

 

Anniversary

At its 10th anniversary celebratios in Suva yesterday, stakeholders reflected on what they had achieved so far and how they would like to move forward.

“In a world driven by the cash economy and international flows of capital, many people in developing countries, still remain excluded from formal financial services,” said chief guest and Australia’s High Commissioner to Fiji, John Feakes.

“For these people, this exclusion exacerbates their challenges to borrow or save money to improve their livelihoods.”

The PFIP’s eventual goal is to add one million Pacific Islanders to the formal financial sector by 2019.

“Financial inclusion is making sure that everybody regardless of where you come from, or what you do, has access to the financial products and services they need,” says Poasa Werekoro.

Mr Werekoro is the acting chief manager of financial development at the Reserve Bank of Fiji.

The central bank is working closely with PFIP.

 

No insurance cover

At the time it was launched, the PFIP found majority of people across the region lacked access to any sort of formal insurance cover.

That fact was alarming given the vulnerabilities of Pacific Island economies to external shocks such as natural disasters.

New insurance policy initiatives guided by the programme’s experts has benefitted an estimated 30,000 people in the region, but a lot more are still missing out.

“Education is the main area that we need to focus on,” Mr Werekoro says.

“We’ve had a lot of positive economic growth in the past years but one of our real aims should be to make sure this growth is inclusive.”

 

Programme stakeholders

The programme is an initiative managed by the United Nations Capital Development (UNCD) Fund and the UN Development Programme (UNDP).

Its top funders are the Australian and New Zealand governments, along with the European Union.

Increasingly, stakeholders are looking at digital financial solutions – like M-PAiSA – as people move from physical to virtual markets.

 

Digital solutions

“Markets are moving online; social gatherings are moving online; and that is where everything happens these days,” says Shailendra Prasad, Vodafone Fiji’s head of m-Commerce and corporate affairs.

“If that is where the business is moving then payment options and solutions must also be made available.”

Digital innovations are being nursed inside regulatory sandboxes to aid this endeavour.

“Regulatory sandboxes are almost like innovation testing labs,” Mr Werekoro says.

“The sandbox is a controlled experiment that lets people create innovations and financial technology solutions.

“They work with us in this sandbox so they can understand the regulations we can impose on them and we help them understand the risks of the innovation.”

There is growing pool of research that links the availability of affordable financial services to improved household welfare and increased small business activity.

The PFIP believes initiatives that support financial inclusion and independence are worth pursuing.

Feedback:  sheldon.chanel@fijisun.com.fj

 



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