HOW DO PEOPLE IN PAPUA NEW GUINEA USE MONEY IN THE …

HOW DO PEOPLE IN PAPUA NEW GUINEA

USE MONEY IN THE DIGITAL ERA

PB – at University of Waikato

From the Papua New Guinea National

Financial Capability Survey (and inputs

from the Financial Diaries Study)

September 2015

Conducted by Institute of National Affairs (INA), lead

researcher Dr Jonathan Sibley Conducted for: Bank of

Papua New Guinea, World Bank (Funding from Korea

Trust Fund), Sampling Prof John Gibson, UOW, with

NSO support, including Census data

If they have money and if the Digital Age

reaches them.....

-aspirations to have bank accounts, but other

savings/payment methods still prevalent ....

Contents

1. Overview of the Studies

2. Context: financial services and financial inclusion

Papua New Guinea

3. Context: Morobe and Madang

4. Financial Inclusion in Morobe and Madang

5. Financial Capability in Morobe and Madang

6. Implications for policy and strategy

OVERVIEW OF THE

FINANCIAL CAPABILITY

STUDY/IES

Issue

• Knowledge of levels of financial inclusion and related

understanding of financial capability in Papua New

Guinea is currently limited

• Increasing knowledge and understanding is particularly

important as the formal financial system continues to

develop rapidly in PNG and households, whether urban or

rural, are required to:

• Use an expanding array of financial instruments

• Manage increasingly complex household finances

• Adopt extended planning horizons which increasingly encompass

the need to plan for retirement

Prior Studies:

• Some prior studies on financial behaviour in PNG

(Salisbury et al), and household income and expenditure

(Christie 1980), HIES etc...

• Recent studies of financial needs, capacity and utilisation:

in Phase 1 of the Financial Capability Survey (undertaken

in settlements in NCD and with contrasted communities in

Central Province)

• Pacific Regional Study – funded by PFIP

• Financial Diaries – funded by PFIP – 3 locations in PNG

Financial Diaries (PFIP et al):

• data collected in 2013 across three cities/towns –

NCD, Kimbe, and Goroka over 25 weeks capturing

information from 240 respondents of which 50% women.

Also quantitative transaction data, 45 in-depth qualitative

interviews for better understand the rationale behind

financial decisions.

• low income households travel long distances to urban

centres for formal financial transactions and seldom use

agents closer to place of stay.

• Formal financial transactions usually driven by external

factors (e.g. palm oil buyers and employers paid wages

through direct bank deposits). These transactions on an

average usually large, around PGK 400 and once in three

weeks households face lump sum expenditure

of PGK 100 financed through cash flows.

• Low income households heavily depend on social

networks to finance emergency expenditures like funerals

which account to PGK 200 every four months.

Scope and Objectives

• Study scope: Population study of financial inclusion and

financial capability in Papua New Guinea

• Presentation scope: Population study of financial inclusion

and financial capability in Morobe and Madang

• Objective of study:

• Examine financial inclusion and financial capability for both women

and men who make financial decisions on behalf of their household

• Develop a baseline measure of financial inclusion and financial

capability for PNG

Limitations

• This presentation is an initial output from the national

financial capability study, and focuses on Morobe and

Madang Provinces

• The findings may be indicative of the national situation,

but do not represent the national situation - (nature of

Morobe and Madang)

• The focus of the study is households. The use of financial

services by formal and informal businesses has not been

examined

Definitions

• Financial Inclusion:

• “A state in which all working age adults, including those currently

excluded by the financial system, have effective access to the

following financial services provided by formal institutions: credit,

savings, payments, and insurance.” (GPFI & CGAP)

• Financial Capability:

• “The (internal) capacity a person has to act in their best financial

interest, given socio-economic environmental conditions.” (World

Bank)

• Financial capability can also be extended to include acting

in the interests of the household in which a person lives

Instrumentation

• 2010 teams from Papua New Guinea, Zambia, Malawi,

Namibia, Tanzania, Uruguay, Mexico and Colombia met to

develop a global instrument to measure financial

capability

• Development completed in 2011: Interviewer administered

closed question survey

• Instrument used or planned to be used in 14 countries in Latin

America, Africa, Middle East and East Asia and the Pacific

• PNG piloted the survey (Tok Pisin) in 2012

• Preparations for the national survey commenced in 2013

• Field work in Morobe and Madang undertaken 2014

Sampling

• National sample developed (SRS)

• 5 provinces selected. Target n=1,000 households, 2,000

interviews

• Both the woman and the man who make most financial decisions

on behalf of their household to be interviewed

• Two provinces selected in Momase Region: Morobe and

Madang

Target Actual

Districts 8 8

Census Units 40 36

Households 400 359

Individual Surveys 800 688

FINANCIAL SERVICES AND

FINANCIAL INCLUSION

PAPUA NEW GUINEA

Financial Services Accessibility

• Financial services accessibility is increasing in PNG: • December 2012: 9,257 financial services access points

• March 2015: 11,015 financial services access points

• However, overall network density is low*: • 1.9 branches (2013) per 100,000 adults (global average 12.6,

Pacific Islands average 18.9 per 100,000 adults)

• 16.5 agents (2013) per 100,000 adults (Kenya 268, Peru 118, Tanzania 57 per 100,000 adults)

• 8.4 ATMs (2013) per 100,000 adults (CAGR 8.0%) (global average 34 per 100,000 adult, Pacific Island CAGR 11.6%)

• Financial services access points are concentrated in urban locations

*BPNG and Global Findex

Financial Inclusion

• Levels of financial inclusion in PNG are low

• Estimates for adult financial inclusion vary between

435,000 and 800,000 adults (apx. 7-15% adult population)

• BPNG estimate unmet demand to be high:

• Deposit services (for economically active adult population) – apx.

5.38m people

• Credit - 95% and 98% of the adult population.

PNG Government Commitment

• Financial inclusion is a development priority

• Expanding financial inclusion and enhancing financial

literacy incorporated in key national plans: The

Development Strategic Plan 2010-2030 and Vision 2050

• The National Informal Economy Policy (2011-2015)

identified financial inclusion as a priority action area to

facilitate the development of the informal economy

BPNG Commitment

• BPNG has taken the lead role in PNG to increase financial inclusion and financial literacy

• Financial inclusion is one of BPNG’s two strategic goals

• Actions include:

• Membership of the Alliance for Financial Inclusion (AFI)

• Sponsored and led the establishment of the Centre for Excellence in Financial Inclusion (CEFI)

• Supported (in conjunction with ADB) the establishment and management of the Microfinance Expansion Project (MEP)

• Commitment to increasing financial inclusion data, in particular supply-side data.

• 2013 BPNG signed the Maya Declaration, committing to seven financial inclusion and financial literacy goals

• The Maya Declaration goals provide a foundation for financial inclusion and financial literacy policy and strategy

Maya Declaration Goals

1. To reach 1 million more unbanked low-income people in Papua New Guinea, 50% of

whom will be women

2. To lead efforts to create a financially competent generation of Papua New Guineans

through financial education and financial literacy

3. To actively support innovative use of technology for scaling-up access to financial

services and financial literacy

4. To strengthen consumer protection by issuing prudential guidelines and creating a

platform for various national regulators and industry networks to monitor consumer

protection

5. To begin the process of integrating financial inclusion in local and national

government, including getting the National Executive Council to endorse the National

Financial Inclusion and Financial Literacy Strategy by quarter 4 of 2013

6. To promote regular collection and use of financial access data to inform policy making

and help identify key dimensions of financial inclusion in Papua New Guinea

7. To optimize these results through knowledge sharing and effective coordination of

stakeholders, including development partners, by the newly established Centre of

Excellence for Financial Inclusion chaired by the Bank of Papua New Guinea.

MOROBE AND MADANG

Geography and Population

• Diverse geography: mountains to coastal plains

• Population: 1.17 million (16% of PNG population)

Economy

• Diverse economy: major mining, agriculture, fishing

projects. Tourism in Madang.

• Lae (and to a lesser extent Madang) a hub for formal

sector business with extensive informal sector trade

• Apx. 50% of population rely on subsistence income (in

particular women)

0

10

20

30

40

50

60

70

under 15 15-64 64+

Age Profile - years of age (%)

Morobe

Madang

5.4

5.9

5.5

7.4

5.3

Morobe Madang Nat Average Nat urban Nat rural

Average Household Size - 2011

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

Total citizens Male Female Total citizens under 18

Provincial Population (& Age and Gender breakdown- 2011)

Morobe

Madang

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

% male % female % under 18 dependency ratio (<15 & >64: 15-64)

Population Profile %ages - Morobe and Madang Provs 2011

Morobe

Madang

0

10

20

30

40

50

60

70

80

90

100

Morobe Madang National Ave Urban ave Rural ave

Literacy 2011 (%age of citizens)

all

male

female

0

10

20

30

40

50

60

70

80

90


Ever Been To School 2011 (% of Citizens)

all

male

female

0

10

20

30

40

50

60

70


%age in Wage Employment 2011

all

male

female

0

10

20

30

40

50

60

70

80


Subsistence Employment 2011 (% of employed population)

all

male

female

0

20

40

60

80

100

120

growing foodcrops growing betelnut selling food crops/cooked food

selling betelnut mustard

home ownership Trad dwellings

Household Profile - Livelihood and Home Ownership - % 2011

Morobe

Madang

Nat Average

Nat urban

Nat rural

0

5

10

15

20

25

30

35

40

45


Migrants 2011 (%age of Total Population)

all

male

female

Infrastructure and Services

• Transport infrastructure is rudimentary, large areas are

inaccessible by road

• Telephony

• Urban households have ready access to mobile-phone telephony

• Most of the rural population can access mobile-phone telephony (at

least within a short walk from village)

• Mains electricity only available in urban areas

• School attendance 57-58%

• Reported literacy 68-70% (2011 census) – but at what level?

• Frontline spending on health ‘low’*

* ‘Below the Glass Floor’, World Bank, 2013

Financial Services

• Urban and township locations have good access to formal

financial services access points:

• 2061 financial access points (branch, agent, ATM, EFTPOS)

• Urban communities have access to multiple financial

services providers

• Urban communities have access to a broad range of

formal financial services

• However, most households in rural locations do not have:

• Access to a formal financial services provider

• Access to a range of products and services from which to select an

appropriate product.

Financial Services Access Points*

Banks S&Ls Micro-

finance ANZ BSP WBC Total

Branches

Urban 3 4 2 9 2 2

Township 0 1 0 1 0 2

ATMs

Urban 5 16 6 27 NA NA

Township 0 1 0 1 NA NA

Agents/

Instore

Urban 11 4 ND NA NA

Rural ND 23 ND NA NA

* Data from organisation websites and BPNG

FINANCIAL INCLUSION IN

MOROBE AND MADANG

Many adults in rural areas are not confident in their

ability to communicate in English

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Male Female Male Female Male Female

Urban Township Rural

Cannot communicate in English Speak in English only Speak and read and/or write in English

Mobile phone access is high. However capacity to use

a mobile phone is low in rural communities



Own/ access a Mobile

Phone 94.40% 83.60% 96.60% 76.10% 48.40% 21.80%

Make calls and texts 85.90% 87.90% 80.50% 36.10% 61.20% 44.90%

Capacity for mobile

phone banking 81.20% 73.50% 77.8% 27.5% 29.60% 9.80%

There is significant variance in formal financial product

ownership by location, income source and gender

Urban Township

Rural

Male Female Male Female

Male Female Formal

Sector

Informal

Sector/

Self-

employed

Formal

Sector

Informal

Sector/

Self-

employed

Formal

Sector

Informal

Sector/

Self-

employed

Formal

Sector

Informal

Sector/

Self-

employed

0 7.30% 22.30% 36.20% 43.90% 10.30% 25.00% 29.70% 66.40% 60.20% 81.00%

1 14.00% 21.30% 23.00% 35.10% 9.70% 50.00% 27.70% 16.80% 18.80% 9.20%

2 7.30% 10.20% 8.20% 10.00% 14.80% 0.0.% 0.00% 16.80% 8.40% 5.10%

3> 71.40% 46.20% 32.70% 11.00% 65.20% 25.00% 42.60% 0.00% 12.60% 4.70%

The range of financial products owned varies

significantly by location, income source and gender

Urban Township Rural Livelihood

Male Female Male Female Male Female Formal Sector

Informal

Sector/ Self-

employed

Savings 68% 38% 83.60% 24.30% 21% 9% 62.30% 13.40%

Long term

savings 56% 28% 45.40% 17.10% 10% 5% 59.70% 3.50%

Credit 50% 16% 13.00% 6.80% 6% 1% 25.50% 3.30%

Protection 8% 8% 0% 0% 2% 0% 2.00% 1.50%

Urban households use a range of payment modalities,

rural holds typically use cash

Has Account Does not have Account

Urban Township Rural Urban Township Rural

Day-day items

such as food or

transport

Cash 79.2% 95.5% 88.0% 95.2% 97.2% 99.1%

Electronic - Bank 20.8% 4.5% 12.0% 4.8% 2.8% 0.7%

Bills

Cash 61.3% 81.5% 93.0% 88.4% 90.3% 100.0%

Electronic - Bank 27.7% 18.5% 0.0% 11.6% 9.7% 0.0%

Mobile phone 11.1% 0.0% 7.0% 0.0% 0.0% 0.0%

School or

university fees

Cash 31.4% 74.0% 88.6% 49.2% 72.7% 91.0%

Electronic - Bank 68.6% 26.0% 11.4% 50.8% 27.3% 8.2%

Loan repayments

Cash 17.1% 17.8% 41.3% 31.7% 0.0% 47.5%

Electronic - Bank 78.2% 82.2% 58.7% 68.3% 100.0% 52.5%

Rent/ lease

payments

Cash 38.3% 39.5% 80.0% 84.2% 100.0% 92.5%

Electronic - Bank 61.7% 60.5% 12.2% 15.8% 0.0% 7.5%

Community/

religious donations

Cash 100.0% 100.0% 86.2% 100.0% 100.0% 96.2%

In-kind/ non-cash 0.0% 0.0% 13.8% 0.0% 0.0% 3.8%

Urban households use electronic remittance modalities, rural

households use mainly mail/ personal delivery

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Send Receive Send Receive Send Receive


Mobile phone Post Office Bank Mail/ personal delivery

There are significant differences in savings account

ownership by location

• Globally, 50-60% of adults in developing economies

report owning an account a formal financial institution

(Global Findex)

• Overall apx. 40% of adults living in urban or township

areas in Morobe and Madang reported owning a formal

savings account

• However, in rural areas less than 10% of the adult

population reported owning an account

Distance to a branch* appears to be an important

factor in account ownership

0

5

10

15

20

25

30

35

40

45

0.%

5.%

10.%

15.%

20.%

25.%

30.%

35.%

40.%

45.%


Dis

tan

ce

to

Ba

nk (

KM

)

Has

a B

an

k A

cc

ou

nt

Has a Bank Account Distance to Bank

*location where an account can be opened

In urban areas there are significant differences in

savings account ownership by gender



Savings/

Cheque (Debit

Card)

55% 28% 52% 24% 10% 8%

Savings

(Passbook) 32% 13% 49% 4% 14% 1%

Respondents who owned a savings account were

more likely to try to save money

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Try to save money for the future Try to save money regularly Try to have some provision for emergencies/ unexpected expenses

Does not have Savings Account Formal Sector

Does not have Savings Account Informal Sector/ Self-employed

Has Savings Account Formal Sector

Has Savings Account Informal Sector/ Self-employed

Ownership of long term savings is related to

employment



Fixed Term Deposit 11% 0% 0% 0% 2% 1%

Unit Trust/Shares 14% 6% 6% 0% 4% 1%

Life Insurance 25% 8% 0% 0% 2% 1%

Provident/ Superannuation 44% 25% 45% 17% 7% 4%

Apx. 50-55% of formal sector employees reported owning

a provident or superannuation account

Levels of formal credit appear similar to those reported

for developing countries generally



Commercial/ development loan 27% 7% 0% 7% 3% 1%

Secured Personal/ House Loan 20% 6% 13% 0% 1% 1%

Unsecured Personal/ House Loan 11% 3% 6% 0% 2% 0%

Credit Card 8% 3% 0% 7% 4% 0%

• 9% of adults in developing countries report borrowing from a formal financial

institution (Global Findex)

• 7% of households in Morobe/ Madang reported some form of formal credit

obligation

Levels of insurance ownership were very low

• Less than 2% of households reported owning house or

motor vehicle insurance.

• 8% of urban households reported owing an insurance

policy

• 1% of rural households reported owning an insurance

policy

Location and gender appear to be the principal barriers

to formal financial service usage

• Location

• Good access in urban communities

• Very limited or non existent access in rural communities

• Lack of rural financial services infrastructure appears to be a

principal barrier to financial inclusion

• Gender

• Globally 65% of men and 58% of women report owning a bank

account (Global Findex)

• In urban households Morobe and Madang 68% of men and 38% of

women reported owning a savings account

• Even when financial services are accessible women are

significantly less likely to be financially included

Men were consistently more likely to report they were

responsible for selecting household financial products than

women

Male Female

Informal

sector

Formal

sector

Informal

sector

Formal

sector

Respondent only 30.7% 63.0% 5.6% 49.3%

Respondent (solely or with someone else) 43.6% 87.5% 17.9% 58.1%

Respondent’s partner (solely or with someone else) 2.0% 4.5% 29.8% 27.2%

Nobody at all 46.8% 8.0% 45.9% 14.7%

Other factors: to be analysed (education/years in school etc)

FINANCIAL CAPABILITY IN

MOROBE AND MADANG

Most households endeavoured to plan the use of

income

• Most households (60%) reported planning how income

would be used. Most households (55-75%) also reported

the plan was only a ‘rough plan’.

• Household planning is influenced by the income cycle

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0% Does not plan

Days

Weeks Months

Six months or more

Informal Sector/ Self-employed Formal Sector

Many households periodically had a cash surplus

• Slightly more than half of the households stated they had

money left over after meeting household expenses at

least some of the time

• Households typically saved the surplus to provide for

unforeseen expenses for example emergencies or

medical fees (30-50% of households), or for food and

other necessary items (30-45% of households)

Most households regularly had a cash shortfall

• 80-90% of households reported running short of money

after meeting household expenses. Households which

only had informal sector income were more likely to state

the house ran short of funds

• Overall, there appears to be a different pattern used by

urban and rural households in respect to funding cash

shortfalls:

• All households stated they would seek to borrow from family or

friends

• Urban households tended to also state they would borrow money

• Rural households tended to state they would seek to earn more

money.

Credit was frequently used to buy food

• Between 50-60 % of households, irrespective of location

or primary source of income, reported using credit or

borrowing money to buy food if there was a cash shortfall.

• 30% of urban households stated they borrowed money to

repay outstanding obligations and were 2-3 times more

likely to state money would be borrowed than rural

households

A variety of reasons were stated for the household

experiencing a cash deficit


Informal

Sector/ Self-

employed

Formal

Sector

Informal

Sector/

Self-

employed

Formal

Sector

Informal

Sector/ Self-

employed

Formal

Sector

Insufficient/low income 33% 18% 31% 61% 42% 23%

Fluctuating/unreliable

income 6% 0% 27% 4% 35% 18%

Unexpected

expenses/events 38% 22% 23% 22% 11% 32%

Increased cost of food and

other necessary items 20% 26% 19% 14% 18% 27%

Need to provide financial

help to others 24% 23% 15% 14% 6% 37%

Overspending 31% 44% 27% 37% 16% 34%

Failure to plan

ahead/budget 31% 26% 31% 11% 34% 24%

Urban households were considerably more aware of

the household’s cash position than rural households

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

Does not know much money spent personally in the last week?

Does not know much money the household spent last week?

Does not know much money you and your household have available for

day-to-day spending


Most households would be unable to meet major future

expenses

• About half of the households surveyed stated they

expected to incur a major expense at some time over the

coming year

• 50-60% of urban households stated they would be able to

meet the expense without borrowing, compared to 40% of

rural households)

• 70% of households stated they would not be able to cover

a major unexpected expense without borrowing.

Most households endeavoured to plan for the

children’s future*

Cited Also Cited

1 2 3 4 5 6

1. Saving money for children's

education 44% 37% 15% 13% 9% 41%

2. Saving money to pass on to children 20% 84% 26% 20% 15% 41%

3. Investing money to pass on to

children 8% 82% 62% 23% 29% 38%

4. Investing in land/ buildings to pass

on to children 9% 64% 42% 21% 25% 43%

5. Investing in business to pass on to

children 6% 67% 49% 41% 39% 30%

6. Planning for children's future in

other way 33% 56% 24% 10% 12% 5%

*Households typically had been between 3-3.5 dependent children

Many respondents did not know how they would meet

expenses when they could no longer work

• The concept of ‘retirement’ is usually associated with

formal employment

• Typically in PNG people must work until they are no

longer able to work

• 44% of respondents stated they had no strategies to meet

their or their household’s expenses when they were no

longer able to work due to age - they did not know how

they would meet expenses when they were no longer able

to work

Respondents who stated they had a plan for old age typically

stated financial help from others or ongoing income generating

activity

Cited Also Cited

1 2 3 4 5 6 7 8 9

1. Financial help/support 26%

12% 6% 2% 0% 10% 31% 36% 2%

2. Savings/ other financial

assets 13% 25%

17% 3% 6% 12% 18% 48% 7%

3. Employer superannuation 7% 25% 33%

6% 6% 0% 17% 29% 10%

4. Other Superannuation 2% 33% 25% 25%

8% 0% 34% 27% 0%

5. Insurance 1% 0% 100% 60% 20%

20% 0% 19% 20%

6. Sale of non-financial assets 8% 34% 20% 0% 0% 2%

29% 58% 8%

7. Inheritance 13% 61% 17% 9% 4% 0% 17%

48% 5%

8. Business 31% 31% 20% 6% 1% 0% 15% 21%

7%

9. Will always work 3% 20% 35% 26% 0% 6% 24% 24% 79%

There was a significant difference in expectations by

income source and gender

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Male Female Male Female

Formal Sector Informal Sector/ Self-employed

Will provide enough money to cover expenses Will not provide enough money to cover expenses

Has no strategies

Engagement with household financial management

was typically focussed on shorter term expenditure

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Setting and managing the

household budget

Managing your household’s spending on

essential items

Managing regular household expenses

Managing the household’s one-

off expenses

Managing requests for

financial assistance

Managing the household’s

financial documents

Respondent Partner/ someone else No one

Men were more likely to state they were responsible for

expenditure than women – across all categories

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Setting and managing the

household budget

Managing your household’s spending on

essential items

Managing regular household expenses

Managing the household’s one-

off expenses

Managing requests for

financial assistance

Managing the household’s

financial documents

Male Female

Location and the ability to communicate in English

strongly influenced product selection behaviour

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Searched for information from a range of sources

Considered alternatives Searched to find product best met needs

Did not check product terms and conditions

Urban Communicate in English Rural Communicate in English

Urban Cannot Communicate in English Rural Cannot Communicate in English

Most respondents had limited knowledge of the cost of

the financial services they used

Do not know how much interest has been have paid on loans over the past year 82%

Do not know how much interest has been received on savings over the past year 86%

Do not know the fees you have paid on financial products over the past year? 82%

Findings from this study are similar to the findings from

earlier (PFIP) Pacific Island studies

• Most low income households owned few financial products. Financial products owned were principally savings products. There was very limited use of formal credit

• Rural households were significantly less likely to own formal financial products and services than urban households and exhibited lower levels of financial capability/ financial competence

• In Fiji, the Solomon Islands and PNG, women were consistently less likely to be involved in the management of household finances (other than the management of day-day expenditure) and were less likely to own formal financial products

• Many adults did not know how they would meet expenses when they were no longer working – other than relying on their children or family or friends

• The overall level of financial knowledge was low and most adults had very limited understanding of the cost of financial services

IMPLICATIONS FOR

POLICY AND STRATEGY

Overall Implications

• The findings from the present study suggest that the

current National Financial Inclusion and Financial Literacy

Strategy may need to be further developed:

• to facilitate significant strengthening of the rural financial services

architecture

• to facilitate significant strengthening of financial inclusion and

financial literacy programmes, in particular urban programmes in

order to increase financial inclusion by women

• to ensure a continuing commitment to further strengthening

consumer protection

Implications for the Maya Declaration Goals

• Goal: To reach one million more unbanked low-income

people in Papua New Guinea, 50% of whom will be women

• Findings from Morobe and Madang suggest that, without major

development of the rural financial services infrastructure,

bringing large numbers of Papua New Guineans, who are

currently financially excluded, into the formal financial system

will not be possible

• Unless there is a substantive change to financial inclusion

products/ services/programmes to bring women into the formal

financial system, the goal of gender equity will probably not be

achieved, rather the gender gap may be further exacerbated

Implications for the Maya Declaration Goals (cont.)

• Goal: (BPNG) to lead efforts to create a financially competent generation of Papua New Guineans through financial education and financial literacy

• The focus on budgeting and planning, a common feature of financial literacy programmes, appears to be appropriate

• As the use of formal credit expands, inclusion of responsible borrowing modules may be warranted

• Consideration should be given to including longer term savings, or asset accumulation modules

• There is an ongoing need for financial literacy programmes specifically for women


• Goal: To actively support innovative use of technology for scaling-up access to financial services and financial literacy

• It may be appropriate to consider the development of national financial services delivery architecture for rural communities in PNG.

• Developing extensive branch networks in rural communities is not economic

• Technology based solutions will need to be core to a rural financial services architecture

• However, limited mobile phone capability in rural communities, in particular by women, suggests the expansion of mobile phone-based financial services (as opposed to the use of mobile telephony to deliver agent based financial services) in rural areas may require concurrent capacity building.


• Goal: To strengthen consumer protection by issuing

prudential guidelines and creating a platform for

various national regulators and industry networks to

monitor consumer protection

• Consumer awareness appears to be limited for many

adults and there is therefore potential vulnerability to

predatory practices


• Goal: To promote regular collection and use of

financial access data to inform policy making and

help identify key dimensions of financial inclusion in

Papua New Guinea

• Findings from the present study have contributed to the

understanding of financial inclusion and financial

capability in PNG

• The National Financial Capability study should be

completed and a national baseline developed.

Thank you

THANK YOU

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