Speech by Governor Loi M Bakani at the Financial Inclusion Innovation Summit at Stanley Hotel, Port Moresby on 29th August, 2017

Acknowledgement

Dame Meg Taylor, Secretary General, Pacific Islands Forum
Minister For Commerce, Trade & Industry, Honourable Wera Mori, MP
Ms Michelle Curry, Chief Executive Officer of Foundation for Development Corporation
Microfinance Pacifica Network members
Development partners in Papua New Guinea
United Nations & Pacific Financial Inclusion Program officials
Foreign delegates representing central banks, financial institutions and other partners,
Ladies and Gentlemen

We would like to warmly welcome you to the Financial Inclusion Innovation Summit and to Port Moresby, PNG – if you are here for the first time.

Talking Points

The Bank of PNG and CEFI are extremely pleased to be the local hosts and one of the sponsors of the Financial Inclusion Innovation Summit. This is one of the key activities of the financial inclusion calendar of PNG, and continues our journey of financial inclusion in PNG and also in the Pacific.

Last Friday, 18th August, we hosted a seminar on Blockchain Technology as a potential tool to enhance financial inclusion.

This year, we hosted the Pacific Islands Regional Initiative (PIRI) which was also a Financial Inclusion forum, in May 2017, which was attended by all the central banks governors and officials from the Central Banks in the Pacific to deliberate on activities under financial inclusion. PIRI is a Pacific regional initiative under the Alliance of Financial Inclusion (AFI).

Financial expositions are organized by BPNG to bring financial institutions close to the ordinary people and provide options for clients to choose the most suitable financial services. Due to the Financial Inclusion Innovation summit and the national elections in 2017 we have not planned for one for this year but will host it in 2018. In parallel to the seminar this week, we are hosting a mini Microfinance fair to demonstrate the regulated microfinance sector in PNG that now reaching around 0.5 M unreached population. Microfinance industry in the country have come a long way since its inception in 2004 and have been in the forefront of the innovations. I encourage you all to visit the stalls to lean about these institutions.

PNG perceive financial inclusion in much broader sense than just providing access. We feel creating enabling environment, making the financial services responsive to the needs of the clients and encourage use of the financial service through new innovations to improve the standard of living.

I feel innovations (new ways) is the way forward for Financial Inclusion in PNG as the majority of the people are excluded from the formal financial sector given the geographical and structural constrains we face in PNG and Pacific. This result in subsistence life style and low standard of living.

One form of innovations we have introduced is to encourage the setting up of microfinancial institutions through a moderate process of licensing. In 2014, we licensed a Women’s only Microbank to provide banking to women. This is the first of its kind in the region.

Bank of PNG involvement with AFI (Association for financial Inclusion – network of central banks dedicated in promoting financial inclusion) communed in 2011 and an International Obligation presented as Maya declaration in 2013 at AFI Global forum held in Malaysia. I will present a new set of targets as part of our renewed Maya declaration next month in Egypt at AFI Global Forum.

Setting of a dedicated entity for financial Inclusion – Centre for Excellence in Financial inclusion (CEFI) on 2013, Launch of the first financial inclusion strategy of PNG – Fancily inclusion & Financial literacy strategy 2014/15 in 2014 and the launch of the second strategy – Financial inclusion strategy 2016-20 in 2016 are key milestones in the journey of financial inclusion in PNG.

We strongly believe technological innovations is the way for reaching very remote parts of our country since the traditional bank branches are not viable.

Bank of PNG created regulatory space to introduce digital financial services in the country. We are extremely pleased to note over 800,000 people are linked through mobile finial services and Banks, mobile network operators and even postal services are operating in this area. Bank will invest on Retail Electronic Payment system (REPS) which will facilitate interoperability among the mobile wallets.

PNG have over 13,000 financial service alternative delivery points in the country that include bank agents, ATM’s and EFTPO’s.

Opening of over 1.5 million bank accounts, introduction and expansion of financial education, Introduction of Children savings and Micro insurance using digital platform are some of the achievements of PNG. I am sure during the next two days you will discuss these activities in detail and learn from each other’s experiences.

Financial Sector System review (World bank study under Department of Treasury & Bank of PNG) have identified Financial inclusion as a major area for intervention and Financial inclusion policy will be drafted in 2017. This is work in progress.

BPNG & CEFI will look for new innovations for financial inclusion and have even commenced a research project to find ways of using Block chain in this area.

We are sure the deliberation during the next 3 days will provide us new path ways in expanding the frontiers of financial inclusion. I am looking forward for it.

I extend my sincere appreciation for Microfinance Pacifica network and Foundation for Development Corporation for identifying PNG for this important regional initiative and thank Pacific Financial Inclusion Program for joining as co-sponsor.