National Financial Inclusion and Financial Literacy ...€¦ · National Financial Inclusion and Financial Literacy Strategy 2014-2015 2 Bank of Papua New Guinea ... Together, the

National Financial Inclusion and Financial Literacy Strategy 2014-2015


Hon. Don Polye, Minister for Treasury and Member for Kandep (centre right) launched the “National Strategy for Financial Inclusion and Financial Literacy 2014 – 2015” and Mr. Loi M. Bakani, Governor of Bank of Papua New Guinea (centre left) launched a National Youth Savings Campaign where 13 financial institutions made commitment to participate.



2

Bank of Papua New Guinea

Financial inclusion is emerging as a priority for policymakers and regulators in financial sector development, with an increasing number of countries introducing comprehensive measures to improve access to and usage of tailored financial services, informed by a fast-growing body of experience and knowledge on its role in promoting inclusive growth. The growing priority placed on financial inclusion is illustrated by the commitments made by financial regulators from 35 developing countries to financial inclusion and to financial education under the Maya Declaration. Papua New Guinea, through the Bank of Papua New Guinea, also joined the league by making our commitments under the Maya Declaration at the Alliance for Financial Inclusion’s annual Global Policy Forum in 2013. The basis for this commitment is the National Financial Inclusion and Financial Literacy Strategy 2014-2015, developed in consultation with a diverse range of stakeholders, including representatives from various government departments, to support the achievement of the financial inclusion aspirations articulated in the National Informal Economy Policy 2011-2015. Research supports the notion that improved financial tools will give people greater ability to capture opportunities and move out of poverty at faster rates, while slowing the rate at which they are knocked back into poverty due to adverse shocks. Impacts will occur at three levels: i) reducing transaction costs; ii) managing health, lifecycle and agricultural shocks; and iii) economy-wide efficiencies. But just 15 percent of Papua New Guineans have access to any type of formal financial services and if you go out to the rural areas, and if you go out to women and the youth of our country, the numbers drop even quite a bit below that. One of the most promising ways to deliver these financial services to the poor – profitably and at scale – is by using digital payment platforms. As people adapt to new technologies, as they are lifting themselves out, one of the things that hold them back is the lack of financial services. Their only choice option is cash and cash is a bit of a trap; it can be stolen, you can’t submit yourself to discipline policies, you don’t get interest on it, you don’t have insurance or credit and so in a lot of ways, it is the most limiting way to hold assets. Today, we have five electronic money providers, who are increasing the pace at which people are offered financial services through innovative use of local trade stores to increase outreach. The launch of the automated National Payments System, supported by the passage of the National Payments Act 2013, will support interoperability and accelerate transactions. I believe that the combined effect of the interventions articulated in the Action Plan of the National Financial Inclusion and Financial Literacy Strategy 2014-2015 will create new opportunities to develop innovative partnerships to enable access for Papua New Guineas to partake in growing an inclusive and sustainable Papua New Guinea.

ii


iii


3

I thank Prime Minister Peter O’Neil for his guiding leadership and Treasurer Don Polye for his unrelenting support. I also thank our donor friends and the numerous stakeholders who have stepped up to help achieve an inclusive financial sector in our country. In particular, I thank the Pacific Financial Inclusion Programme for their technical and coordination support through the Working Group on Financial Inclusion and Financial Literacy Strategy 2014-2015. Loi M. Bakani GOVERNOR, Bank of PNG Chairman, Centre for Excellence in Financial Inclusion December 5, 2013


iv


4

Contents

A. Introduction ......................................................................................................................... 5

B. Current Status of Financial Inclusion in PNG ...................................................................... 7

C. Key Principles ....................................................................................................................11

D. Implementation Management ............................................................................................13

E. Action Plan 2014-2015 .......................................................................................................16


5


5

A. Introduction The National Financial Inclusion and Financial Literacy Strategy 2014-2015 is the outcome of a series of consultations led by the Working Group on Financial Inclusion and Financial Literacy1 and the national stakeholders workshops held in August 2013. The Bank of Papua New Guinea (BPNG) hosted the workshops with technical and financial assistance from the UN Capital Development Fund (UNCDF) implemented Pacific Financial Inclusion Programme2 (PFIP) supported by United Nations Development Programme (UNDP), the Australian Aid Agency and the European Union (EU), and the Center for Excellence in Financial Inclusion (CEFI). Stakeholders convened to build on the priorities for financial inclusion in the National Informal Economy Policy 2011-20153, and established targets for 2014 and 2015 in the country’s first ever national strategy on financial inclusion and financial literacy. The 2-day national stakeholders workshop was attended by senior representatives from the private sector, financial service providers, development partners, rural producers and micro entrepreneurs and government agencies including Department of Community Development, Religion and Youth; Department of Trade, Commerce and Industry; Department of Education; and Department of National Planning and Monitoring. Preceding the national workshop, a workshop to address the financial exclusion of women was also held.

1 The Working Group membership consists of BPNG, CIMC Sub-committee on Financial Inclusion, CEFI, PFIP, IFC, ADB, and the Microfinance Expansion Project, Australian Aid and the Department of Community Development. The Working Group is led by the BPNG. 2 The Pacific Financial Inclusion Programme (PFIP) is a joint programme of the UN Capital Development Fund (UNCDF) and United Nations Development Programme (UNDP) with additional funding support from Australian Aid and the European Union/Africa, Caribbean and Pacific Microfinance Framework Programme (EU/ACP). 3 The National Informal Economy Policy 2011-2015 recognizes financial inclusion as a priority action area as well as the intrinsic role of BPNG, the formal financial sector and the telecommunications sector.


6

Responsibilities for the implementation of the National Financial Inclusion and Financial Literacy Strategy are delineated in Section E. Action Plan 2014-2015. Implementation will be coordinated and monitored by CEFI which was endorsed by the National Executive Council (NEC) in 2013 as the coordinating entity for all initiatives relating to financial inclusion. CEFI will


6


6

Responsibilities for the implementation of the National Financial Inclusion and Financial Literacy Strategy are delineated in Section E. Action Plan 2014-2015. Implementation will be coordinated and monitored by CEFI which was endorsed by the National Executive Council (NEC) in 2013 as the coordinating entity for all initiatives relating to financial inclusion. CEFI will


7

Financial Service Providers at a Glance, July 2013 4 commercial banks with 111

branches More than 390 ATMs and over 13,000

EFTPOS 4 microbanks with 27 branches 771 commercial bank, microbank and

Post PNG agents 21 savings and loan associations (few

actively operating) 6-8 NGO-MFIs 4 superannuation funds 2 Investment Managers; and 3 Fund

Administrators 4 life insurers and 18 general insurers

work closely with the Sub-committee on Financial Inclusion of the multi-stakeholder Consultative Implementation and Monitoring Council (CIMC) responsible for overseeing the implementation of the National Informal Economy Policy.

B. Current Status of Financial Inclusion in PNG Financial inclusion in Papua New Guinea (PNG) has received active support from the national government, resulting in a diverse range of service providers, financial products and delivery channels. Together, the five mobile money providers claim over 300,000 registered users since the opening of the mobile money market in 2011. Growing at an annual rate of 202 percent since 2008, the number of financial services agents now surpasses bank branches in the country. In PNG several significant barriers restrict the number of low-income households that participate in the formal financial sector. The high costs of serving poor customers relative to the revenues generated by small transactions and balances, the high costs of building a distribution system to acquire and serve low-income customers, and a lack of products and services tailored to the needs of low-income customers deprive individuals, families and communities of the socio-economic benefits associated with financial inclusion.


7


7

Financial Service Providers at a Glance, July 2013 4 commercial banks with 111

branches More than 390 ATMs and over 13,000

EFTPOS 4 microbanks with 27 branches 771 commercial bank, microbank and

Post PNG agents 21 savings and loan associations (few

actively operating) 6-8 NGO-MFIs 4 superannuation funds 2 Investment Managers; and 3 Fund

Administrators 4 life insurers and 18 general insurers

work closely with the Sub-committee on Financial Inclusion of the multi-stakeholder Consultative Implementation and Monitoring Council (CIMC) responsible for overseeing the implementation of the National Informal Economy Policy.

B. Current Status of Financial Inclusion in PNG Financial inclusion in Papua New Guinea (PNG) has received active support from the national government, resulting in a diverse range of service providers, financial products and delivery channels. Together, the five mobile money providers claim over 300,000 registered users since the opening of the mobile money market in 2011. Growing at an annual rate of 202 percent since 2008, the number of financial services agents now surpasses bank branches in the country. In PNG several significant barriers restrict the number of low-income households that participate in the formal financial sector. The high costs of serving poor customers relative to the revenues generated by small transactions and balances, the high costs of building a distribution system to acquire and serve low-income customers, and a lack of products and services tailored to the needs of low-income customers deprive individuals, families and communities of the socio-economic benefits associated with financial inclusion.


8

Table 1 below shows usage and access in PNG using the G20 Financial Inclusion Indicators for which data is available. Table 1 – PNG Financial Inclusion Indicators

Category Indicator Indicator

Calculation4 Measures

Formally banked adults

% of adults5 with an account at a formal financial

institution (June 2013

National 14.63%

Usage

Southern 21.05% Highlands 8.33% Momase 17.82% Islands 20.75%

Number of deposit accounts per 1,000 adults

(June 2013)

National 439

Southern 632 Highlands 250 Momase 535 Islands 623

Adults with credit at regulated institutions

% of adults with at least one loan outstanding from a

regulated financial institution (December 2012)

National 6.98%

Usage Number of borrowers per

1,000 adults (December 2012)

National 70

Point of Service & E-money accounts

Number of branches per 100,000 adults

(June 2013)

National 3

Access


Number of ATMs per 100,000 adults

(June 2013) National 10

Number of POS terminals per 100,000 inhabitants


E-money accounts

Number of e-money accounts for mobile

payments (July 2013)

National 386,000 Access

The unbanked segment currently stands at 85.62 percent of the total population with the Highland Region having the highest percentage at 91.92 percent, followed by the Momase Region at 82.30 percent. Notably, both regions also have correspondingly low levels of human

4 Calculated by using raw data collected for the PNG Financial Services Sector Assessment 2013 (Report being finalized) 5 Adults defined as age 15 and above as per international criteria


8


8







National 14.63%

Usage



(June 2013)

National 439





National 6.98%



National 70



(June 2013)

National 3

Access






E-money accounts







8







National 14.63%

Usage



(June 2013)

National 439





National 6.98%



National 70



(June 2013)

National 3

Access






E-money accounts







9

development indicators, including the lowest literacy rates at 39.2 percent and 53.9 percent respectively.6 Figure 1 – Total Banked and Unbanked Adults by Region

Financial access points - defined here as bank branches and agents - are also disproportionally distributed. In the Southern and Island Regions, one branch/agent services 3,004 and 3,350 adults on average respectively. In the Highlands region, where 42 percent of the country’s population resides, there is only one branch/agent serving 8,427 adults. Table 2 – Ratio of Branches/Agents and Economically Active Population

Total No. of Branches and Agents

Adult Population Adult Population Served Per Branch/Agent

Southern Region 252 756,977 3,004 Highlands Region 218 1,836,978 8,427 Momase Region 198 1,007,261 5,087 Islands Region 158 529,254 3,350 National 826 4,142,514 5,015

Financial Competency of Low-income Population According to the 2013 survey results measuring financial competency of low-income households in PNG7, the overall level of adult financial competence is low and low-moderate (see Table 3 below). Table 3 – Levels of Financial Competence by Competency Area

6 HIES 2009-2010 7 PFIP and BPNG, 2013, Papua New Guinea Financial Competency Survey Report


9









9


9









9









9









10

Competency Score Competency Area High None of the Competency Areas were scored as High Moderate – High Competence with managing regular and one-off expenditures

Low-Moderate

Competence with managing essential expenditures Competence with setting household goals and plans Competence with managing household income Competence with identifying and recording household expenditures Competence with managing requests for financial assistance Competence with managing savings Competence with managing borrowing Competence with managing long term savings

Low

Competence with keeping household records Competence with household budgeting Competence with non-cash transactions Competence with managing cost of money

Other key findings of the survey include: Rural households appear to face constraints to financial competence due to lack of access

to financial services (in particular, transaction services), Men in urban communities are more likely to identify themselves as financially competent.

This may be due to higher English language ability and easier access to financial services (in particular through employment). Women appear to be less involved in the management of the household’s finances,

Cash continues to be the dominant mode of payment across both urban and rural

households, Households identified as most competent at managing immediate activities and less

competent at managing more sophisticated activities, in particular planned activities and non-cash transactions,

Low competence in managing cost of money make low-income people especially vulnerable

to predator lending and other scams Women’s Financial Inclusion Women constitute approximately 50 percent of the country’s seven million population but make up less than 30 percent of the total financial services accounts in the country. They represent an untapped population of economically active, low-income micro entrepreneurs and rural producers. The financial disempowerment of women in low-income households in PNG is pervasive. Irrespective of where they live, women in low-income households are:

less likely to be able to communicate in English less likely to own and be able to use a mobile phone less likely to own financial products less likely to be involved in household financial management likely to work, but in occupations that have a lower requirement for a bank account


10


10

Competency Score Competency Area High None of the Competency Areas were scored as High Moderate – High Competence with managing regular and one-off expenditures

Low-Moderate

Competence with managing essential expenditures Competence with setting household goals and plans Competence with managing household income Competence with identifying and recording household expenditures Competence with managing requests for financial assistance Competence with managing savings Competence with managing borrowing Competence with managing long term savings

Low

Competence with keeping household records Competence with household budgeting Competence with non-cash transactions Competence with managing cost of money

Other key findings of the survey include: Rural households appear to face constraints to financial competence due to lack of access

to financial services (in particular, transaction services), Men in urban communities are more likely to identify themselves as financially competent.

This may be due to higher English language ability and easier access to financial services (in particular through employment). Women appear to be less involved in the management of the household’s finances,

Cash continues to be the dominant mode of payment across both urban and rural

households, Households identified as most competent at managing immediate activities and less

competent at managing more sophisticated activities, in particular planned activities and non-cash transactions,

Low competence in managing cost of money make low-income people especially vulnerable

to predator lending and other scams Women’s Financial Inclusion Women constitute approximately 50 percent of the country’s seven million population but make up less than 30 percent of the total financial services accounts in the country. They represent an untapped population of economically active, low-income micro entrepreneurs and rural producers. The financial disempowerment of women in low-income households in PNG is pervasive. Irrespective of where they live, women in low-income households are:

less likely to be able to communicate in English less likely to own and be able to use a mobile phone less likely to own financial products less likely to be involved in household financial management likely to work, but in occupations that have a lower requirement for a bank account


11

more likely to not know how they will support themselves when they are no longer able to earn

Recent research by Women’s World Banking (WWB)8 revealed that domestic conflicts that result in violence are often struggles over control of money. In such struggles women’s personal money is highly vulnerable.

C. Key Principles

The following principles, adopted from the G20 Principles for Innovative Financial Inclusion, aim to help create an enabling policy and regulatory environment for innovative financial inclusion. The enabling environment can critically increase the speed at which the financial services access gap will close for the unbanked population. These principles for innovative financial inclusion derive from the experiences and lessons learned by policymakers worldwide, especially those from developing countries. In the planning, implementation and results measurement of the National Strategy, BPNG and key stakeholders will take into consideration the G20 Principles for Innovative Financial Inclusion. These are: 1. Leadership: Cultivate a broad-based government commitment to financial inclusion to help

alleviate poverty and drive inclusive economic growth, 2. Diversity: Implement policy approaches that promote competition and provide market-

based incentives for delivery of sustainable financial access and usage of a broad range of affordable services (savings, credit, payments and transfers, insurance) as well as a diversity of service providers,

3. Innovation: Promote technological and institutional innovation as a means to expand

financial system access and usage, including by addressing infrastructure weaknesses, 4. Protection: Encourage a comprehensive approach to consumer protection that recognizes

the roles of government, providers and consumers, 5. Empowerment: Develop financial literacy and financial capability, 8 WWB, 2013, Deepening Financial Inclusion for Women in the Pacific Islands: An assessment of the gender issues surrounding women’s ability to access and control financial resources in Papua New Guinea and Samoa


11



C. Key Principles








11


11



C. Key Principles








12

6. Cooperation: Create an institutional environment with clear lines of accountability and co-

ordination within government; and also encourage partnerships and direct consultation across government, business and other stakeholders,

7. Knowledge: Utilize improved data to make evidence based policy, measure progress, and

consider an incremental “test and learn” approach acceptable to both regulator and service provider,

8. Proportionality: Build a policy and regulatory framework that is proportionate with the risks

and benefits involved in such innovative products and services and is based on an understanding of the gaps and barriers in existing regulation;, and,

9. Framework: Consider the following in the regulatory framework, international standards,

national circumstances and support for a competitive landscape: an appropriate, flexible, risk-based Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regime; conditions for the use of agents as a customer interface; a clear regulatory regime reflecting for electronically stored value; and market-based incentives to achieve the long-term goal of broad interoperability and interconnection.

These principles are a reflection of the conditions conducive to spurring innovation for financial inclusion while protecting financial stability and consumers.


12


13

D. Implementation Management

The Financial Inclusion Policy contained in National Informal Economy Policy 2011-2015 provides the national development policy framework for the Financial Inclusion and Financial Literacy Strategy 2014-2015. CEFI, endorsed by the NEC to coordinate all financial inclusion initiatives in PNG, will have the primary role of coordinating and monitoring the implementation of the strategy. CEFI will work closely with the CIMC Financial Inclusion Sub-Committee, currently chaired by the Governor of BPNG, to coordinate, monitor and report on the implementation of the targets set out in the strategy’s action plan.


13


14

CEFI aims to build an inclusive partnership mechanism and will build on the competency areas of key stakeholders in order to maximize impact from a wide range of financial inclusion efforts. Figure 2 – CEFI’s Approach

Coordination CEFI will, as appropriate, set up a number of working groups to help address key priorities identified in the strategy. The membership of the working groups will be drawn from the CIMC Informal Economy Committee’s (IEC) Sub-committee on Financial Inclusion. CEFI will also leverage the existing consultative mechanism within CIMC. The working groups will include key stakeholders working in the respective areas and will meet quarterly to measure progress against the key areas of the strategy that fall within their ambit. The proposed working groups will include: Working Group on Consumer Protection

This working group will serve as the coordinating body for consumer protection and market conduct initiatives. It will work with industry standard bodies such as the ICCC and other regulators to appropriately protect vulnerable users of financial services. In addition, the working group will promote globally accepted best practices in empowering clients and protecting their interests.

Working Group on Financial Education and Financial Literacy This working group will oversee the implementation of the financial literacy activities in the strategy and will harness the capacities of its member organizations to support timely implementation. It will have a specific focus on facilitating actions to introduce financial education into the school curricula. This working group will also actively promote standards for the delivery of financial literacy training in PNG.

Working Group on Electronic Banking This working group will focus on innovative ways to expand access and encourage markets using ICT. It will facilitate the development of payment systems that serve the low-income population sustainably in order to reduce the time and money that low income-earning people spend to conduct financial transactions. This working group will also identify


14


15

pertinent research that will enable service providers to better serve low-income and remote communities.

Working Group on Data and Measurement

This working group will encourage and promote the importance of collecting and sharing relevant data to measure progress in financial inclusion. It will work closely with the National Statistics Office, CEFI and BPNG to help institutionalize a standard set of indicators that will be collected on a regular basis. The working group is expected to also actively promote the sharing of data and to highlight gaps in outreach and services through digital mapping and other effective mediums of data presentation.

Working Group on Inclusive Insurance

This working group will actively promote the development of a conducive policy and regulatory environment for the growth of the inclusive insurance market. It will facilitate partnership between government and private sector for offering relevant products to the poor; including the use of alternate channels for distribution.

Working Group on Government Coordination on Financial Inclusion

This working group will ensure that the various government departments’ activities related to financial inclusion are coordinated and complimentary, with the overall goal of decentralizing delivery of financial services, financial education, and financial awareness for low-income consumers and MSMEs.

Gender will be mainstreamed across all working groups, with focused attention on women’s access to financial services, greater gender balance in inclusive financial sector intermediaries (i.e. governance, management and staffing), and creating an enabling policy, regulatory and legislative environment that promotes and enhances the development of women-centric financial services. Advocacy & Knowledge CEFI will also undertake advocacy and knowledge-sharing/dissemination as part of its core function. CEFI’s advocacy will focus on the importance of financial inclusion to economic growth with provincial governments. CEFI will create a platform for provincial governments to commit to the goals of financial inclusion and financial literacy and help create tangible interventions through provincial allocation of (District Service Improvement Program (DSIP) and Provincial Service Improvement Program (PSIP) funds to financial education. Most importantly, CEFI’s advocacy is critical to ensuring that the government-funded credit schemes conform to best-practices and do not distort the ultimate goal of creating an inclusive financial sector in PNG.

CEFI will also generate knowledge products to harness the inherent value of its data collection efforts, such as quarterly trends analyses of financial inclusion in PNG. CEFI will also enable its website to feature and disseminate all knowledge and research products emerging out of partners’ work in the sector.

For its important role in gender balance and equity, CEFI will have a gender desk. This desk will support the significance and importance gender has in achieving the vision, mission and objectives of financial inclusion.


15


16

E. Action Plan 2014-2015 The National Financial Inclusion and Financial Literacy Strategy has identified financial inclusion (for individuals as well as micro and small enterprises) as a key driver of economic growth, reduced economic vulnerability for individual household, poverty alleviation, promotion of gender equity and balance, and improved quality of life for people around the country. Guided by the G20’s Innovative financial inclusion9 principles, Papua New Guinea will create an enabling policy and regulatory environment that will accelerate financial inclusion. The goal of a financial inclusion strategy and action plan is to bring together initiatives from the public sector, financial and non-financial institutions, and other stakeholders to expand and improve financial inclusion while maintaining sufficient focus on financial stability, integrity, market conduct, and consumer protection. PNG’s Commitments for 2014-2015 to the Maya Declaration on Financial Inclusion made at the September 2013 Alliance for Financial Inclusion Global Policy Forum will form the framework of the action plan. These commitments are:

i. To reach one million more unbanked low-income people in PNG and micro and small enterprises, with a diverse range of financial services. Fifty percent of people reached will be women;

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

through financial education and youth-focused financial products and financial literacy; iii. To actively support innovative use of technology for scaling-up access to financial

services and financial literacy; iv. To strengthen consumer protection by issuing prudential guidelines and creating a

platform for various national regulators and industry networks to monitor consumer protection;

v. To begin the process of integrating financial inclusion in local and national government; vi. To promote regular collection and use of financial access data to inform policy making

and help identify key dimensions of financial inclusion in PNG; and vii. To optimize these results through knowledge sharing and effective coordination of

stakeholders, including development partners, by the newly established CEFI chaired by the Bank of PNG.

9 Innovative Financial Inclusion means improving access to financial services for poor people through the safe and sound spread of new approaches.


16

Nat

iona

l Fin

anci

al In

clus

ion

and

Fina

ncia

l Lite

racy

Str

ateg

y 20

14-2

015

17

A

ctio

n

Lead

O

rgan

izat

ions

St

art D

ate

En

d D

ate

M

easu

reab

le In

dica

tors

1 ST

RAT

EGIC

OB

JEC

TIVE

1: T

O R

EAC

H O

NE

MIL

LIO

N M

OR

E U

NB

AN

KED

LO

W-IN

CO

ME

PEO

PLE

IN P

APU

A N

EW G

UIN

EA A

ND

MIC

RO

A

ND

SM

ALL

EN

TER

PRIS

ES, W

ITH

A D

IVER

SE R

AN

GE

OF

FIN

AN

CIA

L SE

RVI

CES

. FIF

TY P

ERC

ENT

OF

PEO

PLE

REA

CH

ED W

ILL

BE

WO

MEN

1.1

Mea

sure

qua

rter

ly p

rogr

ess

of b

anki

ng o

ne m

illio

n m

ore

unba

nked

(lin

ked

to 6

.1.2

)

BPN

G w

ith a

ssis

tanc

e fro

m d

onor

s an

d th

e W

orki

ng G

roup

on

Dat

a &

Mon

itorin

g

Qua

rter 1

20

14

Ong

oing

1)

Rep

ort o

n pr

ogre

ss

(link

ed to

6.1

.2)

1.2

Mea

sure

qua

rter

ly p

rogr

ess

of e

nsur

ing

that

50%

of

the

1 m

illio

n m

ore

unba

nked

are

wom

en (l

inke

d to

6.

1.2)

BPN

G w

ith a

ssis

tanc

e fro

m d

onor

s an

d th

e W

orki

ng G

roup

on

Dat

a &

Mon

itorin

g

Qua

rter 1

20

14

Ong

oing

1)

R

epor

t on

num

ber o

f w

omen

ban

ked

(link

ed to

6.1

.2)

1.3

Dev

elop

SM

E R

isk

Shar

e Fa

cilit

y to

ena

ble

acce

ss

to fo

rmal

, sm

all a

nd m

ediu

m e

nter

pris

es (S

ME)

Dep

artm

ent o

f Tra

de,

Com

mer

ce, a

nd

Indu

stry

with

as

sist

ance

from

IFC

Ong

oing

Q

uarte

r 4 2

015

1)

Ris

k-sh

are

faci

litie

s op

erat

iona

l; 2)

Rep

ort

on n

umbe

r of S

MEs

ac

cess

ing

finan

cial

se

rvic

es (l

inke

d to

6.

1.2)

1.4

Dev

elop

Mic

ro E

nter

pris

e R

isk

Shar

e Fa

cilit

y to

en

able

acc

ess

to lo

ans

for i

nfor

mal

sec

tor m

icro

en

terp

rises

, inc

ludi

ng w

omen

-ow

ned

mic

ro

ente

rpris

es

Dep

artm

ent o

f Tr

easu

ry w

ith

assi

stan

ce fr

om

Mic

rofin

ance

Ex

pans

ion

Proj

ect

(MEP

)

Qua

rter 2

, 20

14

TBD

1)

Ris

k-sh

are

faci

litie

s op

erat

iona

l; 2)

Rep

ort

on n

umbe

r of m

icro

en

terp

rises

acc

essi

ng

finan

cial

ser

vice

s (li

nked

to 6

.1.2

)

1.5

Impl

emen

t sec

ured

tran

sact

ions

fram

ewor

k w

ith

onlin

e re

gist

ry to

sup

port

the

Pers

onal

Pro

pert

y Se

curit

y A

ct

Trea

sury

with

as

sist

ance

from

AD

B

Ong

oing

Q

uarte

r 3 2

014

1)

Onl

ine

regi

stry

fu

nctio

ning

; 2)

Tr

ack

the

num

ber o

f fil

ings

1.6

Prov

ide

finan

cial

and

tech

nica

l ass

ista

nce

to s

cale

-up

acc

ess

to m

obile

mon

ey (M

M) a

nd b

ranc

hles

s ba

nkin

g (li

nked

to 3

.1.4

) IF

C, P

FIP

, AD

B, M

EP

Ong

oing

Q

uarte

r 4 2

015

1)

Trac

k nu

mbe

r of M

M

acco

unts

the

coun

try

(from

bas

elin

e of

38

6,00

0 in

Jul

y 20

13)

1.7

Prov

ide

finan

cial

and

tech

nica

l ass

ista

nce

to c

reat

e vi

able

incl

usiv

e in

sura

nce

prod

ucts

for t

he lo

w-

inco

me

popu

latio

n

ME

P, P

FIP

O

ngoi

ng

Qua

rter 4

, 201

5

1)

Viab

le in

clus

ive

insu

ranc

e pr

oduc

t of

fere

d by

at l

east

on

e fin

anci

al

inst

itutio

n


17

Nat

iona

l Fin

anci

al In

clus

ion

and

Fina

ncia

l Lite

racy

Str

ateg

y 20

14-2

015

18

2 ST

RA

TEG

IC O

BJE

CTI

VE 2

: TO

LEA

D E

FFO

RTS

TO

CR

EATE

A F

INAN

CIA

LLY

CO

MPE

TEN

T G

ENER

ATIO

N O

F PA

PUA

NEW

GU

INEA

NS

THR

OU

GH

FIN

ANC

IAL

EDU

CAT

ION

AN

D Y

OU

TH-F

OC

USE

D F

INAN

CIA

L PR

OD

UC

TS A

ND

FIN

ANC

IAL

LITE

RAC

Y

2.1

Stre

ngth

en a

nd E

nhan

ce th

e C

oord

inat

ion

of a

nd D

evel

opm

ent o

f Effe

ctiv

e Fi

nanc

ial L

itera

cy P

rogr

ams

for L

ow-In

com

e Po

pula

tion

2.1.

1 Es

tabl

ish

Wor

king

Gro

up o

n Fi

nanc

ial E

duca

tion

and

finan

cial

lite

racy

and

hol

d qu

arte

rly m

eetin

gs

CEF

I and

CIM

C IE

C

Sub-

com

mitt

ee o

n FI

, with

sup

port

from

M

EP

Qua

rter 1

20

14

Ong

oing

1) M

inut

es o

f Sub

-gr

oup

mee

tings

; 2)

Annu

al w

ork

plan

of

the

wor

king

gro

up

2.1.

2 C

ompi

le a

nd u

pdat

e co

nsol

idat

ed li

st o

f fin

anci

al

liter

acy

prov

ider

s - t

heir

loca

tion,

con

tent

and

ta

rget

gro

up o

f tra

inin

g C

EFI

Qua

rter 1

20

14

Qua

rter 1

20

14, O

ngoi

ng

1) U

pdat

ed li

st o

f pr

ovid

ers

and

cove

rage

of t

rain

ing

circ

ulat

ed q

uarte

rly

2.1.

3

Iden

tify

min

imum

key

lear

ning

out

com

es th

at

finan

cial

lite

racy

pro

vide

rs s

houl

d m

easu

re,

diss

emin

ate

to p

rovi

ders

and

mon

itor

effe

ctiv

enes

s

CEF

I, PF

IP

Qua

rter 2

20

14

Qua

rter 2

201

4

1) K

ey le

arni

ng

outc

omes

issu

ed to

pr

ovid

ers

and

advo

cate

d; 2

) ac

hiev

emen

t of

outc

omes

mea

sure

d 2.

2 In

crea

se F

ocus

on

Fina

ncia

l Edu

catio

n fo

r You

th

2.2.

1 Si

gn M

oU w

ith D

epar

tmen

t of E

duca

tion

to

intro

duce

fina

ncia

l edu

catio

n in

sch

ool c

urric

ulum

D

epar

tmen

t of

Educ

atio

n, B

PNG

O

ngoi

ng

Qua

rter 1

20

14

1) M

oU s

igne

d an

d im

plem

enta

tion

stra

tegy

agr

eed

upon

2.2.

2 Fi

nanc

ial e

duca

tion

prog

ram

mes

cus

tom

ized

to

suit

stud

ents

at s

choo

ls a

nd o

ther

lear

ning

in

stitu

tions

Dep

artm

ent o

f Ed

ucat

ion

with

as

sist

ance

from

IF

C a

nd P

FIP

Qua

rter 1

20

14

Qua

rter 4

20

15

1) N

umbe

r of m

odul

es

that

sui

t sch

ool c

hild

ren

& st

uden

ts o

f oth

er

train

ing

inst

itutio

ns; 2

) N

umbe

r of s

choo

l ch

ildre

n a

nd s

tude

nts

prov

ided

with

FL

train

ing

2.2.

3 Be

gin

impl

emen

tatio

n of

fina

ncia

l edu

catio

n in

sc

hool

s (p

rimar

y, s

econ

dary

) and

/or v

ocat

iona

l an

d te

chni

cal i

nstit

utio

n fro

m 2

015

Dep

artm

ent o

f Ed

ucat

ion

with

as

sist

ance

from

Qua

rter 1

20

15

Ong

oing

1)

Sco

ping

exe

rcis

e by

ex

perts

com

plet

ed, 2

) Im

plem

enta

tion

plan


18

Nat

iona

l Fin

anci

al In

clus

ion

and

Fina

ncia

l Lite

racy

Str

ateg

y 20

14-2

015

19

IFC

, PFI

P an

d bu

dget

app

rove

d

2.3

Incr

ease

Und

erst

andi

ng o

f Low

-Inco

me

Cus

tom

ers

2.3.

1 In

crea

sing

und

erst

andi

ng o

f the

beh

avio

r of l

ow-

inco

me

cust

omer

s IF

C, P

FIP

Ong

oing

Q

1 20

14

1) P

ublis

hed

repo

rt on

be

havi

or s

tudy

by

IFC

2)

Wor

ksho

p to

di

ssem

inat

e pr

ofile

s an

d se

gmen

tatio

n of

lo

w-in

com

e cl

ient

s

2.3.

2 N

atio

nal F

inan

cial

Cap

abilit

y Su

rvey

BP

NG

, WB

Ong

oing

Q

4 20

14

1) P

ublis

h re

port

on

Nat

iona

l Fin

anci

al

Cap

abilit

y Su

rvey

3 ST

RA

TEG

IC O

BJE

CTI

VE 3

: TO

AC

TIVE

LY S

UPP

OR

T IN

NO

VATI

VE U

SE O

F TE

CH

NO

LOG

Y FO

R S

CAL

ING

-UP

AC

CES

S TO

FIN

ANC

IAL

SER

VIC

ES A

ND

FIN

ANC

IAL

LITE

RAC

Y

3.1

To S

tren

gthe

n C

oord

inat

ion

and

Col

labo

ratio

n B

etw

een

Stak

ehol

ders

for B

uild

ing

the

Ecos

yste

m to

Sup

port

Cos

t-Ef

fect

ive

Elec

tron

ic a

nd M

obile

Ban

king

3.1.

1 Es

tabl

ish

Wor

king

Gro

up o

n El

ectro

nic

Bank

ing,

an

d ho

ld q

uarte

rly m

eetin

gs

CEF

I, C

IMC

IEC

Su

b-co

mm

ittee

on

FI

Qua

rter 1

20

14

Ong

oing

1)

Min

utes

of S

ub-

grou

p m

eetin

gs;

2)

Annu

al w

ork

plan

of

the

wor

king

gro

up

3.1.

2 R

evie

w o

f the

dra

ft N

ICTA

Reg

ulat

ion

on S

IM

Car

d R

egis

tratio

ns a

nd th

e U

nive

rsal

ID p

ropo

sal

BPN

G w

ith

assi

stan

ce fr

om

dono

rs

Qua

rter 1

20

14

1)

Uni

fied

resp

onse

to

the

draf

t by

the

PNG

Fin

anci

al

Incl

usio

n Se

ctor

3.1.

3

Advo

cacy

and

regu

lato

ry g

uida

nce

for p

aym

ent

syst

ems

inte

rope

rabi

lity

incl

udin

g lo

wer

ing

barr

iers

of

ent

ry fo

r oth

er fi

nanc

ial i

nstit

utio

ns s

uch

as

Mic

ro B

anks

Wor

king

Gro

up o

n El

ectro

nic

Bank

ing

Qua

rter 1

20

15

Qua

rter 4

20

15

1)

Low

ered

bar

riers

of

entry

for o

ther

fin

anci

al in

stitu

tions

in

the

Nat

iona

l Pa

ymen

t sys

tem

3.1.

4 Pr

ovid

e fin

anci

al a

nd te

chni

cal a

ssis

tanc

e to

sc

ale-

up a

cces

s to

mob

ile a

nd b

ranc

hles

s ba

nkin

g

(link

ed to

1.6

)

IFC

, PFI

P, A

DB,

M

EP

Ong

oing

Q

uarte

r 4

2015

1)

Trac

k nu

mbe

r of

mob

ile m

oney

ac

coun

ts in

the

coun

try (f

rom

ba

selin

e of

320

,000


19

Nat

iona

l Fin

anci

al In

clus

ion

and

Fina

ncia

l Lite

racy

Str

ateg

y 20

14-2

015

20

in J

uly

2013

)

3.2

Tran

sitio

n ca

sh to

ele

ctro

nic

paym

ents

to d

rive

up tr

ansa

ctio

n vo

lum

e, lo

wer

cos

ts a

nd b

uild

inte

rcon

nect

ed e

cosy

stem

su

ppor

ting

elec

tron

ic b

anki

ng

3.2.

1 Sc

opin

g st

udy

to m

ap a

nd q

uant

ify G

2P p

aym

ents

(s

ocia

l tra

nsfe

rs, r

oyal

ties,

wag

es, a

nd p

ensi

on

paym

ents

) in

PN

G

PFIP

, IFC

Q

uarte

r 1

2014

Q

uarte

r 4

2014

1)

Publ

icat

ion

on

land

scap

e of

G2P

pa

ymen

ts in

PN

G,

and

cost

-ben

efit

anal

ysis

of

trans

ition

ing

to

elec

troni

c pa

ymen

ts

3.3

Fina

ncia

l lite

racy

ove

r mob

ile p

hone

s an

d ot

her I

TC

3.3.

1 Pi

lot m

obile

pho

ne fi

nanc

ial l

itera

cy p

rogr

amm

es (l

inke

d to

4.1

.4)

PFIP

, IFC

Q

uarte

r 4

2014

O

ngoi

ng

1)

Less

ons

Lear

nt;

2)

Rec

omm

enda

tions

fo

r sca

ling-

up

4 ST

RA

TEG

IC O

BJE

CTI

VE 4

: TO

STR

ENG

THEN

CO

NSU

MER

PR

OTE

CTI

ON

BY

ISSU

ING

PR

UD

ENTI

AL G

UID

ELIN

ES A

ND

C

REA

TIN

G

A PL

ATFO

RM

FO

R

VAR

IOU

S N

ATIO

NAL

R

EGU

LATO

RS

AND

IN

DU

STR

Y N

ETW

OR

KS

TO

MO

NIT

OR

C

ON

SUM

ER P

RO

TEC

TIO

N

4.1

To S

tren

gthe

n C

oord

inat

ion

and

Col

labo

ratio

n B

etw

een

Stak

ehol

ders

for P

rote

ctin

g C

onsu

mer

s an

d G

uidi

ng M

arke

t C

ondu

ct

4.1.

1 Es

tabl

ish

Wor

king

Gro

up o

n C

onsu

mer

Pro

tect

ion,

and

ho

ld q

uarte

rly m

eetin

gs

CEF

I, C

IMC

IE

C S

ub-

com

mitt

ee o

n FI

Qua

rter 1

20

14

Ong

oing

1)

Min

utes

of S

ub-

grou

p m

eetin

gs;

2)

Annu

al w

ork

plan

of

the

wor

king

gro

up

4.1.

2

ICC

C s

treng

then

syn

ergi

es b

etw

een

finan

cial

incl

usio

n an

d th

eir o

wn

man

date

to p

rovi

de s

tand

ards

/cod

e of

co

nduc

t bas

ed o

n in

tern

atio

nal b

est p

ract

ices

on

cons

umer

pro

tect

ion

in c

onse

nsus

with

regu

lato

r

ICC

C, o

ther

st

anda

rd

setti

ng

bodi

es, B

PNG

Qua

rter 2

20

14

Qua

rter 3

20

14

1)

Cod

e of

Con

duct

4.1.

3 Pr

epar

atio

n of

pru

dent

ial g

uide

lines

to li

cens

ed fi

nanc

ial

inst

itutio

ns o

n co

nsum

er p

rote

ctio

n

BPN

G w

ith

assi

stan

ce

from

MEP

O

ngoi

ng

Qua

rter 4

20

14

1)

Prud

entia

l G

uide

lines

de

velo

ped

and

issu

ed

4.1.

4 Pi

lot c

onsu

mer

aw

aren

ess

notic

es v

ia m

obile

pho

nes

(link

ed w

ith 3

.3.1

) PF

IP

Qua

rter 4

20

14

Ong

oing

1)

Le

sson

s Le

arnt

2)

Im

plem

enta

tion


20

Nat

iona

l Fin

anci

al In

clus

ion

and

Fina

ncia

l Lite

racy

Str

ateg

y 20

14-2

015

21

reco

mm

enda

tions

fo

r sca

ling-

up

5 ST

RA

TEG

IC O

BJE

CTI

VE 5

: TO

BEG

IN T

HE

PRO

CES

S O

F IN

TEG

RAT

ING

FIN

ANC

IAL

INC

LUSI

ON

IN

LO

CAL

AN

D

NAT

ION

AL G

OVE

RN

MEN

T

5.1

Inte

grat

ing

finan

cial

incl

usio

n in

loca

l and

nat

iona

l gov

ernm

ent t

hrou

gh fa

cilit

atin

g ef

ficie

nt a

nd e

ffect

ive

coor

dina

tion

to

supp

ort v

ario

us o

n-go

ing

finan

cial

incl

usio

n ef

fort

s; m

onito

r pro

gres

s ov

er ti

me;

and

ens

ure

cont

inui

ty o

n fin

anci

al

incl

usio

n in

nat

iona

l and

sub

-nat

iona

l pla

nnin

g

5.1.

1 Es

tabl

ish

Wor

king

Gro

up o

n G

over

nmen

t Coo

rdin

atio

n fo

r Fin

anci

al In

clus

ion

and

hold

qua

rterly

mee

tings

CEF

I, C

IMC

IE

C S

ub-

com

mitt

ee o

n FI

Qua

rter 1

20

14

Ong

oing

1)

Min

utes

of S

ub-

grou

p m

eetin

gs;

2)

Annu

al w

ork

plan

of

the

wor

king

gro

up

5.1.

2 D

SIP

Annu

al B

udge

t mak

es p

rovi

sion

for f

inan

cial

lit

erac

y an

d fin

anci

al e

duca

tion

for

rura

l-bas

ed in

form

al

wor

kers

acr

oss

at le

ast 5

0% o

f all

dist

ricts

Offi

ce o

f R

ural

D

evel

opm

ent

thro

ugh

advo

cacy

by

Dep

artm

ent o

f C

omm

unity

D

evel

opm

ent,

Rel

igio

n an

d Yo

uth

supp

orte

d by

C

EFI

Qua

rter 4

20

14

Ong

oing

1)

D

SIP

annu

al

expe

nditu

re re

ports

5.2

Stan

dard

izin

g de

finiti

on o

f Mic

ro, S

mal

l and

Med

ium

Ent

erpr

ises

5.2.

1 As

sist

Dep

artm

ent o

f Tra

de, C

omm

erce

and

Indu

stry

to

esta

blis

h na

tiona

l def

initi

on o

f MS

ME

Wor

king

G

roup

on

Gov

ernm

ent

Coo

rdin

atio

n fo

r Fin

anci

al

Incl

usio

n

Qua

rter 1

20

14

Qua

rter 4

20

15

1)

Nat

iona

l def

initi

on

for M

SM

Es

National Financial Inclusion and Financial Literacy Strategy 2014-2015N

atio

nal F

inan

cial

Incl

usio

n an

d Fi

nanc

ial L

itera

cy S

trat

egy

2014

-201

5

22

6 ST

RA

TEG

IC O

BJE

CTI

VE 6

: TO

PR

OM

OTE

REG

ULA

R C

OLL

ECTI

ON

AN

D U

SE O

F FI

NAN

CIA

L AC

CES

S D

ATA

TO

INFO

RM

PO

LIC

Y M

AKIN

G A

ND

HEL

P ID

ENTI

FY K

EY D

IMEN

SIO

NS

OF

FIN

ANC

IAL

INC

LUSI

ON

IN P

APU

A N

EW G

UIN

EA

6.1

Har

mon

izin

g de

finiti

ons

and

appr

oach

es fo

r dat

a co

llect

ion

usin

g gl

obal

gui

delin

es s

uch

as fr

om G

20/A

FI-P

IWG

dat

aset

, an

d ex

pand

ing

the

scop

e of

col

lect

ion

to in

clud

e al

l dim

ensi

ons

of in

clus

ion

6.1.

1 Es

tabl

ish

Wor

king

Gro

up o

n D

ata

& M

easu

rem

ent,

and

hold

qua

rterly

mee

tings

.

CEF

I, C

IMC

IE

C S

ub-

com

mitt

ee o

n FI

Qua

rter 1

20

14

Ong

oing

1)

Min

utes

of S

ub-

grou

p m

eetin

gs;

2)

Annu

al w

ork

plan

of

the

Wor

king

Gro

up

6.1.

2

Qua

rterly

repo

rting

on

the

PN

G F

inan

cial

Incl

usio

n In

dica

tors

plu

s th

e sp

ecifi

c in

dica

tors

rela

ted

to s

peci

fic

activ

ities

in th

e N

atio

nal F

inan

cial

Incl

usio

n an

d Fi

nanc

ial L

itera

cy S

trate

gy

BPN

G, C

EFI

Qua

rter 1

20

14

Ong

oing

1)

Q

uarte

rly R

epor

ts

6.1.

3 M

aint

ain

regi

stry

of p

rodu

cts

avai

labl

e in

the

mar

ket a

nd

thei

r per

form

ance

aga

inst

con

sum

er p

rote

ctio

n st

anda

rds

C

EFI

Qua

rter 2

20

14

Ong

oing

1)

Annu

ally

upd

ated

re

gist

ry o

f pro

duct

s in

the

mar

ketp

lace

an

d sc

orin

g of

th

ese

prod

ucts

ag

ains

t ind

ustry

co

nsum

er

prot

ectio

n st

anda

rds

7 ST

RA

TEG

IC O

BJE

CTI

VE 7

: TO

OPT

IMIZ

E TH

ESE

RES

ULT

S TH

RO

UG

H K

NO

WLE

DG

E SH

ARIN

G

AND

EFF

ECTI

VE

CO

OR

DIN

ATIO

N O

F ST

AKEH

OLD

ERS,

INC

LUD

ING

DEV

ELO

PMEN

T PA

RTN

ERS,

BY

THE

NEW

LY E

STAB

LISH

ED C

ENTR

E O

F EX

CEL

LEN

CE

FOR

FIN

ANC

IAL

INC

LUSI

ON

CH

AIR

ED B

Y TH

E B

ANK

OF

PAPU

A N

EW G

UIN

EA.

7.1

Adv

ocat

e fo

r kn

owle

dge

shar

ing,

inc

ludi

ng i

mpa

ct

asse

ssm

ents

, les

sons

lear

nt e

tc. t

hrou

gh c

reat

ing

a ce

ntra

l kn

owle

dge

plat

form

whe

re i

nfor

mat

ion

can

be a

cces

sed

and

diss

emin

ated

C

EFI

Qua

rter 1

20

14

Ong

oing

1)

Web

pla

tform

of

know

ledg

e fro

m

PNG

's F

I & F

L st

akeh

olde

rs;

2)

Reg

ular

di

ssem

inat

ion

of

mat

eria

ls a

cros

s pr

ovin

ces

and

depa

rtmen

ts

21



PAPUA NEW GUINEA NATIONAL FINANCIAL INCLUSION AND FINANCIAL LITERACY STRATEGY

2014-2015

Documents

National Financial Inclusion and Financial Literacy ...€¦ · National Financial Inclusion and Financial Literacy Strategy 2014-2015 2 Bank of Papua New Guinea ... Together, the