The first Women’s Micro Bank Limited in Papua New Guinea and the Pacific was opened in August 2014 at the Able Computer building in Port Moresby. According to Bank of Papua New Guinea, the launching was a significant milestone achieved through hard work and determination under the leadership of then chief executive Thushari Hewapathirana, the late businesswoman Janet Sape and the directors. The bank was to encourage women to save money, obtain business loans to start their own businesses and to be self-reliant. Business Editor Shirley Mauludu spoke to the bank’s general manager Gunanidhi Das on the progress of the bank.
MAULUDU: Give a brief background on the Women’s Mirco Bank.
DAS: The Women’s Micro Bank Limited (WMBL) is a licensed Micro Bank regulated by Bank of Papua New Guinea (BPNG).
It was formerly known as the Papua New Guinea Women in Business Microfinance Institute Limited established in 2010.
The bank received its business license from BPNG in May 2014.
The bank is the sixth deposit-taking licensed micro bank in the world and more importantly the first women’s micro bank in Papua New Guinea and the Pacific region.
With its first few months of operations, the bank had been selected as one of the best 50 companies for women among Apec countries.
Currently, the bank is owned by the PNG Women in Business Limited which is the only shareholder.
Women and men are positioned differently in the rural economy because of traditional gender dynamics.
Men tend to produce crops for cash while most women are self-employed in an informal economy engaging in the production of agricultural produce (including vegetable cultivation), small-scale animal husbandry, production of food for household consumption and other micro-scale income generation activities such as roadside kiosks.
Although women devote considerable time to assist men with cash crop production, their labour is viewed as supplementary.
Having identified this as a core trigger and catalyst, the WMBL is committed to invest in low-income rural women through targeted microfinance lending products that meet the needs of women while maintaining organisational sustainability.
It considers women entrepreneurs as the gateway to household stability.
Based on this fundamental, WMBL has developed and designed its financial product and services such as savings mobilisation, lending, insurance and financial literacy and skills development trainings with an explicit focus on women.
International experience in the microfinance sector further strengthens the case for focusing on women since they are identified as better money managers and better repayers of loans than men.
MAULUDU: How many members/ clients does the bank have now?
DAS: The Women’s Micro Bank has branches in Port Moresby and at Lae and agencies in Wewak and Madang.
The bank has clients in these four locations apart from Maprik, Goroka, Jiwaka, Northern, Kerema, Kavieng through the Women In Business Foundation.
There are 18,000-plus customers, of which 8000 are able get banking services.
There are almost 10,000 captive customers waiting for our banking services in different parts of the country.
MAULUDU: What products and services does the bank offer?
DAS: There are six categories of customers the bank is serving now:
- Unemployed women to educate financial literacy for the all-round growth of the family;
- informal businesswomen to make savings a habit and making easy access to finance;
- formal business women through business development skills training to lead the entrepreneurship drive in the country;
- working class women to improve their lifestyle through long-term recurring deposit product or access to easy finance for their need;
- old age/retired women to make proper investment of their money; and,
- Girls to make financial education in their mindset to think big.
There are regular savings product for all the above customers as well as term-deposit (IBD) savings product where WMBL gives a maximum rate of interest in the industries.
At the same time, the WMBL offers different types of loan products.
There are products where no collateral is taken for small business and agriculture loans.
At the same time, the bank gives SME loans to different formal and informal businesses.
Also, the bank believes that a customer can come as a credit customer and then build her savings or can be a good saver to get an exposure loan.
MAULUDU: The bank recently announced that it is offering shares to women entrepreneurs for K1 each. Please explain.
DAS: The WMBL is offering all its customer an opportunity to invest in Women’s Micro Bank Limited as a shareholder.
As members of the Women in Business Foundation Incorporated and customers of the Women’s Micro Bank Limited, both have been the backbone of the success of the bank.
The WMBL board members have resolved to give an opportunity to the members to increase their stake in the bank. While WIB pioneer member’s indirect shareholding through the PNG Women In Business Limited will remain, this offer will make all customers direct shareholders of the bank.
The offer comprises fully-paid ordinary shares to the members of PNG Women in Business Foundation Incorporated and customers of Women’s Micro Bank Limited.
This offer consists of 7,021,300 fully paid ordinary shares at K1 per share to the members with a view to raise K7,021,300.
This new issue is in addition to the existing 3,978,700 ordinary shares owned by current shareholder, PNG Women In Business Limited.
This offer is primarily aimed at strengthening the performance of the bank in four key areas:
- Strengthening capital adequacy requirements set by the Bank of Papua New Guinea;
- expanding branch network adhering to the branch licensing norms of the BPNG to bring the banking services closer to customer place;
- improving the technology between branches and head office for risk management and explore electronic banking services, so that customer can have access to the bank’s services from the comfort of your homes and business premises; and,
- Giving an opportunity to the members of the PNG Women In Business Foundation Incorporated (PNGWIBF) and female clients of the Women’s Micro Bank Limited (WMBL) to hold the direct ownership or shareholding in the bank.
MAULUDU: How is this offering of shares going so far?
DAS: We are recently conducting workshop in the area where we have our customer base.
The response is tremendous and hope to get all the shares subscribed before closing of share offer date on Nov 30, 2017.
MAULUDU: Tell us about the bank’s status in terms of its financial position/ results since it was established.
DAS: We are just three years old in the industry. We were getting support from the Government to run our business. In the meantime, we have new board and new management who have taken a different strategy to make sure that WMBL is getting a profit in two years’ time.
We know that bricks and mortar business such as branch banking is not viable and for that we are more keen to rollout MamaBank Access Points (MAP) throughout countries to ensure that profitability at organisation level comes as early as possible.
MAULUDU: How has the bank been coping given the downturn in the economy?
DAS: We are taking a different approach to generate more business to sustain. Recently, we have opened another channel where we are giving out small loans to all agriculture farmers with zero collateral.
At the same time, the bank is more focusing on rural area where much cash crops money floating around and trying to tap the cash economy to be channelled through bank where bank can make money from these money.
MAULUDU: What is the bank’s economic outlook for this year going forward?
DAS: We are very optimistic to turn around the economic condition of our institutions by the end of this year.
With the offering of shares to our own customers as well, as we are expecting more social investors to join our bank will give us much needed support to rollout our MAP throughout Papua New Guinea so as to tap the cash economy in rural area.
Our strategic business plan is targeting to make profit in 2019.
At the same time we are trying to meet 50 per cent cost from our operational income.