Speech on the Opening of the National Stakeholder Consultation on Expanding Superannuation and Insurance Coverage to MSMEs and Self-employed Workers in PNG

6 August 2024

Keynote speech:

Ms Elizabeth Genia AAICD, Governor, Bank of Papua New Guinea

Daba namona, morning tru and good morning olgeta. It is my pleasure to welcome you to the National Stakeholder Consultation on Expanding Superannuation and Insurance Coverage to MSMEs and Self-employed Workers in PNG.

I would like to start by acknowledging the traditional owners of the land on which we meet, the Motu and Koitabu people, and recognize their elders, past and present.

Financial inclusion is one of the highest priorities for our citizens and is fundamental to improving our economy and the livelihoods of those living in remote areas.

The Bank of Papua New Guinea has been on a journey to integrate financial inclusion into all our activities.

The Central Banking Act has four objectives for the Bank, the first of which is to formulate and implement monetary policy with a view to achieving and maintaining price stability and promoting employment and economic growth, especially of the non-mineral and non-petroleum sector.

We know that economic growth is not possible without a broad and inclusive business enabling environment that includes access to useful financial products and services for all citizens.

This includes products that allow families to support their loved ones when they are no longer working.

While we have no welfare system, Papua New Guinea was an early innovator in superannuation.

The Public Officers Superannuation Fund was established by Public Ordinance in December 1971.

It provided certain officers and employees of the Public Service, members of the Police Force and Approved Authorities access to retirement savings through superannuation.

This became the Public Officers Superannuation Fund after independence.

On 1 January 1991, superannuation became compulsory for all officers and employees of the Public Service.

In 2000, the Government of Sir Mekere Morauta, introduced sweeping changes to the financial industry. This included the introduction of the Superannuation Act in 2000 which brought the superannuation industry under the regulation of the Central Bank.

Under the Act, the Central Bank authorises the operation of superannuation funds where the fund has a licensed trustee, a licensed investment manager and a licensed fund administrator.

Our superannuation funds have been extremely successful, and now provide support for around ten percent of the population.

They provide a range of services and financial literacy is at the core of their businesses.

But still, 90 percent of our population remains unsupported in their retirement, and this include some of the most vulnerable in our community.

We know that financial innovation is the best way to create inclusion and to improve our support for rural and remote communities.

Innovations in financial technology are bringing services to people who have traditionally been excluded from the financial system.

For this reason, in 2021 the Bank launched its Regulatory Sandbox to drive financial inclusion and the adoption of innovative technologies to better serve the citizens of Papua New Guinea.

The Regulatory Sandbox is a pathway to test new and innovative technologies, typically in partnership with a licensed financial institution.

It allows the solution provider and the Bank of Papua New Guinea to observe the innovation in a real-time pilot and determine if it meets our shared inclusion objectives while still providing the trust and confidence we expect in the PNG financial markets.

We kicked off the Sandbox with a pilot of Digizen, Papua New Guinea’s first tailored solution for digital identity and now our first domestic digital identity company.

Identity is of course a key inhibitor of financial inclusion in Papua New Guinea, and products that allow us to securely identify citizens without paper documents will go a long way to resolving these issues.

The Digizen pilot was extremely successful. It graduated from the Sandbox in 2023, and most of you here today will be familiar with the product and are considering ways to integrate it into your businesses.

We have supported the Digizen product with new e-KYC guidance from our Financial Analysis and Supervision Unit, which will be finalised shortly, and we continue to work with you to make e-KYC a widely accepted part of our financial system.

I am very pleased to announce today that our second applicant, pinbox Solutions, has been accepted into the Sandbox and will shortly undertake a pilot with us, which you will hear more about today.

pinBox is responsible for bringing us together today to discuss their product, which gives workers on lower incomes and SME owners access to micro-superannuation and insurance products.

It does this by helping both new and well-established providers tailor their products to provide cost-effective solutions for smaller contributors.

This is incredibly important.

Those of you in the room are our existing providers. Our people have confidence in your products and more citizens would like access to your services if they can be delivered remotely and at a price that works with their household incomes.

Innovations like pinBox can help address the economies of scale that to date have limited your engagement with the 90 percent of our population that remains unserved.

This is a winning outcome for everyone.

I thank pinBox for their interest in bringing their product to Papua New Guinea and for the companies, governments and multilateral organisations that are supporting the pilot and their entrance to our market.

I hope that this partnership will set a benchmark for new entrants to Papua New Guinea and encourage our traditional partners to explore new technologies that help us achieve our shared goal of greater financial inclusion for our citizens.

Your discussions today will help set the agenda for this work, with a focus on pensions, insurance and superannuation.

But I urge you to also think broadly about how our PNG market can best adapt to new technologies in a rapidly changing and increasingly integrated world.

Consider also how we, as the Central Bank, can help you bring inclusive innovation to our citizens.

I welcome your views, and ask you to discuss opportunities with our representatives here today, including AG Awap and his team.

Tanikyu bada herea and I wish you well in your consultation today.

ENDS