Need for Financial Capability empowerment in rural areas

Madang participants listening to Bank of PNG Deputy Governor Benny Popoitai explaining the Bank’s role in the survey during the question and answer session.

The Bank of Papua New Guinea (BPNG) and the Institute of National Affairs (INA) with support from the World Bank presented the findings on Financial Inclusion and Financial Capability study in Morobe and Madang Provinces that was conducted in November 2014.

The presentation began with the Madang findings on Tuesday, 15th December at the Madang Resort Hotel followed by the Morobe presentation which was held at the Lae International Hotel on Friday 18th December respectively.

The presentation on these survey revealed that women have been less involved in all financial household management compared to men, lack of access to financial services like banks, ATMs and barrier to understand financial products was language, as most products are written in English.

BPNG Assistant Governor (AG), Financial Systems Stability, Ellison Pidik and INA Executive Director Paul Barker were the key presenters at the gathering.

Mr Barker said that financial literacy and supporting people particularly women on budgeting and planning are important. “The fact that most bank forms in PNG are only written in English is an unnecessary barrier to saving and managing money,” he said.

Assistant Governor Pidik stated that in a separate Financial Inclusion Strategy established in 2014, it has seen that 80% of the country’s population has no access to financial inclusion and services.

“The attitude of the rural population and the way of living at the village are few of the contributing factors. For example, they only harvest for the day or week however, with money you must plan, budget and save, Mr Pidik added.

Meanwhile, during the question and answer session, issues were raised mainly on how the national government and the financial institutions can assist the rural population to have access to financial services and Financial Literacy being the base foundation for financial capability.

Bank of Papua New Guinea deputy governor Mr Benny Popoitai responded stating that the Bank understands the need for people to have access to financial services however; this would need the government’s approach to address this issue.

“For example, with now the mobile banking we will need the infrastructure and communications technologies to get into the rural setting.

“I believe this is a development issue. All government institutions need to sit down and develop an initiative and provincial authorities need to take ownership so that the Bank can assist with the best way to address this issue,” Mr Popoitai said.