Speech by Loi M. Bakani, CMG Governor Bank of Papua New Guinea at the occasion of Signing of MOU between ENB Provincial Government & CEFI in Rapopo Planation Resort, Kokopo
Mr. Loi M Bakani, CMG
Governor Bank of Papua New Guinea
Board Chairman, Centre for Excellence in Financial Inclusion
at the Occasion of Signing of MOU between East New Britain Provincial Government and CEFI
in Rapopo Planation Resort Kokopo, East New Britain Province
Saturday, 07th August 2021
- Honourable Nakikus Konga MP and Governor of East New Britain Province.
- The Provincial Administrator of East New Britain Mr Wilson Matava
- ENB Deputy Provincial Administrators Mr. Levi Mano and Mr. Marakan Uvano
- Executive Director for CEFI Mr. Saliya Ranasinghe
- The Adviser Commerce, Rosemary Murure, LLG Managers and other Provincial Administration staff who are present on this occasion.
- Managers of the Bank of PNG and CEFI,
- Invited Guests
- Ladies and gentlemen,
Due to urgent work matters, I am unfortunately unable to attend in person to sign the MOU together with the Governor for East New Britain Province, Honourable Nakikus Konga, MP. I have delegated the undertaking to Mr. Ellison Pidik, Assistant Governor, Financial System Stability Group of the Bank of PNG, to sign on my behalf.
Before I begin my speech let me take this opportunity to thank Governor of East New Britain Province Honourable Nakikus Konga and the Provincial Administrator Mr Matava for agreeing to enter into Partnership with CEFI to expand financial inclusion activities in the province. I hope this will be an important milestone for the people of the province who will be provided with access to financial literacy training, banking services and especially digital financial services.
It gives me great pleasure and honour to see the collaborative arrangements between CEFI, BPNG and the ENB Provincial Administration has now culminated by way of the signing of the MOU between CEFI and the East New Britain Provincial Government. It is gratifying to see that the financial inclusion agenda is being actively promoted by CEFI.
Through CEFI’s initiative under the Provincial Government Engagement Roll-out Program, partnerships are being forged with provincial governments and administrations to roll-out financial inclusion activities into the provinces and districts – where the bulk of our population live.
Provincial Government Engagement Program
Already CEFI have signed MOUs with the West New Britain, Milne Bay and New Ireland provincial administrations. Today’s signing of the MOU with East New Britain Province makes the Province the fourth province to have signed a MOU with CEFI. I must also highlight that we have already received numerous interest from other provinces for CEFI and the Bank of PNG to work with them in the financial inclusion space. Our objective is to see all Provinces throughout PNG become partners in promoting financial inclusion and financial literacy.
We are extremely pleased that East New Britain Province will join the Provincial Government roll out program today under the leadership of Governor, Honourable Nakikus Konga and Provincial Administrator Wilson Matava. With the signing of the MOU we expect to build a strong partnership with the provincial administration and financial institutions operating in the province.
CEFI and the Bank stands ready to work with your Provincial Administration and the People of East New Britain Province to implement financial inclusion activities in the province. The Bank of PNG and CEFI recognises the importance of financial inclusion as a key pillar for our nation’s development and I hope that this event will write a new chapter in East New Britain Province’s development.
Financial Inclusion Initiatives
The Bank and CEFI continues to be at the forefront of promoting financial inclusion in the country. The Bank with the support from the National Government established CEFI to drive financial inclusion activities in the provinces and country as a whole. CEFI has been in existence now for 8 years and will be here for a long time given the state of financial inclusion in the country. CEFI has already implemented two financial inclusion strategies, since 2013, and is in the process of developing the third National Financial Inclusion Strategy 2021-2025.
The Bank in collaboration with CEFI are continuing to drive financial inclusion through expansion of people friendly financial services, financial and digital literacy for households and for MSME entrepreneurs and potential ones. This is in addition to other development projects which the Bank is implementing and will soon be rolled out including the following:
1. SME Accelerator Program with one of the key outputs being the Credit Guarantee Facility. The purpose of this initiative is to ensure the credit risk is shared by the Facility and the financial institutions so that the institutions can be encouraged to make loans available to MSMEs. Other components of the program include Financial, Business and market information advisory, innovation hub and strategic partnerships – all mostly to address and enhance demand-side of MSME financial access.
2. Financial Consumer Protection – a project currently in the Bank to improve financial market conduct, provide financial consumer awareness and address activities of loan sharks or money lenders, which is an area that is largely unregulated with customers seriously getting into debt traps.
3. The National Payments System (including KATS and REPS) – REPS stands for Retail Electronic Payments System, which is an ecosystem that facilitates interoperable transfers or payments from one bank or LFI to another. All customers of banks or financial institutions that are members of REPS can make transfers literally to any person or supplier that has a bank account with a member of REPS. The benefits of REPS include the volume of business that gets transacted in the system is huge and this is good for MSME businesses. Currently only six (6) financial institutions are connected to REPS. The plan is for all banks and LFIs to be connected to REPS to make it an effective financial ecosystem for business in the country.
4. Regulatory Sandbox approach – The Bank established a regulatory sandbox, a framework setup to allow emerging technologies and fintech start -ups to accommodate and spur fintech innovations focusing on financial inclusion. This was officially launched on 5th December 2019. The Sandbox is a “place” where innovators can test their (typically technology-based) solutions using real customers and real data in a safe and controlled environment without fear of breaching any of the strict and necessary regulations that are in place to protect the financial services sector and the PNG economy.
5. KYC Utility Project – The Bank is working with the other 8 Central Banks (including RBA, RBNZ, RBF, RBV, CBS, CBSI, CBTL and NRBT with IMF as the Secretariat) to have in place a KYC Utility, that complies with requirements of international standards-setting bodies. Based on this work the Bank and other ID Database Owners such as Civil Registry/NID and MVIL (drivers licences database owner) will establish an electronic identification system to make it easy for mums, dads and youth in villages and towns to establish their identification features which will include facial images, finger prints, signatures, locations, address and other details – this can be done once and anywhere with a bank or an LFI, and the personal information can be accessed by any financial institution. This is essential for financial inclusion to on-board those who are currently unbanked.
The initiatives which I have mentioned (above) are all part of the same story, to assist men, women and youth to have access to knowledge, skills, information, experience and ideas to run projects or businesses better and to make them become better financial managers.
In conclusion, with all the investments and activities initiated by the Bank this has open new opportunities for all Papua New Guineans. Financial inclusion will enable people to have access to these great opportunities. I am sure this will be a commencement of a journey for all who endeavour to use the financial services and operate good and successful businesses in the province. We will evaluate the performance of the program after 3 years and assess the impact of our work in the key performance indicators around increases in bank accounts, savings, successful MSMEs and finally the use of digital financial services in the province
Once again, thank you all for attending & God Bless.