PACIFIC ISLANDS FORUM SECRETARIAT

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1 PACIFIC ISLANDS FORUM SECRETARIAT FORUM ECONOMIC MINISTERS MEETING Tarawa, Kiribati 3-4 July 2012 OUT OF SESSION PAPER REGIONAL EFFORTS TO SUPPORT FINANCIAL INCLUSION AND AWARENESS This information paper developed by the Pacific Financial Inclusion Programme (based with the United Nations Development Programme Pacific Centre), Pacific Financial Technical Assistance Centre and the Pacific Islands Forum Secretariat provides an overview of regional efforts to support financial inclusion and awareness.

2 BRIEFING PAPER REGIONAL EFFORTS TO SUPPORT FINANCIAL INCLUSION AND AWARENESS Purpose This information paper provides an overview of regional efforts to support financial inclusion and awareness in the Pacific. Background 2. The 2020 MoneyPacific goals were adopted by FEMM and the regional central bank governors in This reflected the high priority placed by regional leaders on building financial literacy and inclusion. This paper notes areas where action is being taken to accelerate progress. It focuses primarily on progress in those countries with a central bank, as these countries have been at the forefront of action and coordination. Progress Goal 1: All schoolchildren to receive financial education through core curricula. 3. Good progress continues to be made against this goal in a number of countries. Fiji, with support from AusAID and the Pacific Financial Inclusion Programme (PFIP), will have developed and finalised all the teaching resources for class 1 to class 12 by the end of 2012, with national roll-out planned for 2013 onwards. Samoa and Cook Islands continue to offer financial literacy at specific class levels. 4. Other countries are also planning to address the goal. A full scoping study has been carried out by Young Enterprise Trust of New Zealand and PFIP for Solomon Islands and the implementation strategy is being reviewed by a technical group comprising of the Ministry of Education and Central Bank of Solomon Islands. Bank of PNG (BPNG) and the Ministry of Education have established a Project Action Group and are currently finalising a MOU to jointly formulate an implementation strategy in Papua New Guinea. The Reserve Bank of Vanuatu is actively engaging with the Ministry of Education as it undergoes major curriculum reform this year. Goal 2: All adults to have access to financial education. 5. Both regional and national financial literacy initiatives are making an impact. Actions in this area have been central to the work of the PFIP for a number of years and many other multi-country initiatives are also being undertaken. These are summarised in Table 1 below. 2

3 Table 1: Regional Adult Financial Education Initiatives Initiative Countries Description National financial competency surveys Fiji, Papua New Islands and Samoa These surveys to measure the financial competencies of low income women and men are led by the respective central banks with the financial and technical support of PFIP. Data gathering has been completed in Samoa, Fiji and Solomon Islands, and will begin in PNG in August 2012.Based on these surveys, Bank of PNG (BPNG), Reserve Bank of Fiji (RBF), Central Bank of the Solomon Islands (CBSI), and the Central Bank of Samoa (CBS) are committed to formulating national financial competency building Money Pacific calendar series MoneyPacific website Pacific Financial Literacy Training and Development Money Basics and Financial First Steps Money Minded Pacific Solomon Islands, Tonga, Vanuatu and Samoa regional Tonga, Vanuatu, Papua New Guinea PSWPS Cook Islands, Tonga, Samoa, Fiji, Papua New Islands, Vanuatu Cook Islands, Tonga, Samoa, Fiji, Kiribati, Papua New Islands, and Vanuatu strategies. Interactive calendars with financial literacy messages (including a table of remittance costs) in the vernacular produced jointly by the New Zealand Ministry of Pacific Island Affairs, New Zealand Aid Programme, Pacific Corporation Foundation, Reserve Bank of New Zealand and the World Bank. This website will be launched in June in which PICs can provide information on their financial education activities Westpac Banking Corporation executed financial literacy training for guest workers participating in the Australia Pacific Seasonal Workers Pilot Scheme (PSWPS). It involves predeparture briefings, financial literacy training while in Australia and community training in FICs. Between 1 July 2011 to 31 March 2012, training was delivered to 6,782 people with 51percent female and 58 percent rural participants. The programme is supported by AusAID and managed by PFIP. Westpac delivers a series of financial literacy and entrepreneurship training in all the countries where they operate. Financial literacy is also integral to its branchless banking roll-out across the region which is supported by PFIP. In Fiji, Westpac is also targeting social welfare recipients as part of its social welfarepayment solution. ANZ Bank financed and developed a financial literacy training programme delivered by trained bank personnel in all their Pacific branches. The initial focus is to train ANZ s own staff before extending the training to the community. 6. Central Banks continue to take an active lead role in financial literacy advocacy. Reserve Bank of Fiji s Microfinance Expo continues to be a popular event which takes key financial services providers to the target populations. The Fiji Financial Literacy Working Group is actively coordinating all major financial education programmes and 3

4 has adopted Vuli the turtle as a mascot to promote financial education among children. The Central Bank of Solomon Islands continues with its weekly radio programme, Money Matters and its annual Money Smart Day Programme. The Central Bank of the Solomon Islands and Solomon Islands Credit Union League have carried out a week long financial literacy training and exposure in the Western Province. The Reserve Bank of Vanuatu is running 2 radio programmes a week on financial matters and monitoring financial literacy activities. Bank of Papua New Guinea, under the ADB Microfinance Expansion Project that was launched in April 2012, will create a National Centre for Financial Inclusion (NCFI) that will be responsible for developing and delivering financial literacy training for adults in PNG. The Central Bank of the Solomon Islands, the Central Bank of Samoa and the National Reserve Bank of Tonga run a weekly radio programme, in both the vernacular and English, in which the financial tips developed by the New Zealand Ministry of Pacific Island Affair s MoneyPacific Project are also aired. 7. All Governors have been active in advocacy work and playing an effective role as financial education and inclusion champions. Goal 3: Simple and transparent consumer protection to be in place. 8. Central banks have agreed to work collectively to address consumer protection. The Pacific Central Banks Financial Inclusion Working Group, working in collaboration with the Alliance for Financial Inclusion (AFI) and PFIP, will embark on a regional undertaking in 2012 to strengthen the role of central banks in ensuring client empowerment and market conduct. It will begin with a stock take of current legislation, standardisation of administrative forms and disclosure templates, and exchange of knowledge with the AFI Global consumer empowerment working group. The group will also develop a longer term project with potential support from AFI and other partners. 9. Consumer protection has improved through availability of more information to consumers in a more digestible fashion. In particular, a website to help remitters in Australia and New Zealand to find the most competitive way of sending money home, has been a valuable resource in moderating remittance costs. Goal 4: To halve the number of households without access to basic financial services. 10. All Central Banks have committed to increasing the number of low income people with access to a broad range of financial services. The 6 Pacific Central Banks, in varying degrees, have demonstrated active leadership and commitment to financial inclusion. Fiji and Solomon Islands have set quantitative targets for extending appropriate financial services to 140,000 by 2014 and 70,000 by 2015 respectively. A financial inclusion strategy workshop is planned for Vanuatu in August The Pacific Islands Financial Inclusion Working Group, led by the Central Bank of Samoa, will embark on a project to identify and regularly 4

5 Conclusions collect data to measure financial inclusion. This initiative is funded by AFI and will start with a knowledge exchange visit with the Central Bank of Thailand, which is a best practice institution on financial inclusion data development and application for policy formulation. All 6 Pacific Central Banks have enabled the implementation of mobile phone banking. Current deployments around the region have recorded approximately 700,000 subscribers. In Fiji alone, mobile money deployments monitored by PFIP reported a total of 412,950 subscribers at the end of December 2011 with 36 percent being previously unbanked. Early work in developing insurance for low income people by ADB and PFIP is leading to pilot products in Fiji and PNG. Micro insurance is recognised as one of the fastest growing financial products for low income people in the world and holds significant promise in the Pacific. The Pacific Financial Inclusion Working Group with the support of PFIP, ADB, Access to Insurance Initiative and AFI will be organising a regulators workshop in Nadi in June 2012 to facilitate the development of insurance services for the poor. 11. The 2020 MoneyPacific goals remain a valuable reference tool for leaders, policy makers and development partners. Responsibility for taking work forward on the goals will continue to be a national responsibility, although regional coordination and specialised technical support will be important in a number of areas, including in reporting. 12. The Pacific Financial Inclusion Working Group is emerging to be an active regional group with specific focus on financial inclusion. All 6 central banks participate in the group which meets twice a year to agree on a set of regional priorities for collective action. Their work has been supported by AFI and PFIP. 13. The catalytic and pro-active role that the Pacific Financial Inclusion Programme is playing at policy, meso and retail levels is recognised by the central banks governors and will continue to support reporting to regional policy makers. Pacific Islands Forum Secretariat, Suva. 31 May