All must grow savings culture

 PAPUA New Guineans have been exposed to the western concept of banking and finance since the first commercial bank opened its doors to the public in downtown Port Moresby more than 100 years ago.

The two young Australians who opened the first branch of the Bank of New South Wales (now Westpac) on Douglas Street on May 1, 1910, may or may not have realised the enormous potential of this country, which was yet to be fully discovered.

In the modern era, PNG has kept pace with the changes that have been taking place in the global banking industry. With the rapid development of information technology since the start of the new millennium, Papua New Guineans now enjoy banking services that are equal or similar to those offered anywhere in the world.

From the early days of passbook and cheque accounts, major commercials banks in PNG now offer internet banking, credit cards and a wide network of ATMs (automated telling machines) and EFTPOS (electronic funds transfer at point of sale) facilities.

Despite the technological advances that have made banking services accessible at our finger tips, there is one concept of banking that is still foreign to most of our citizens. And that is the savings culture, which is part and parcel of successful banking but has yet to grow roots in this country.

For various reasons, a large number of Papua New Guineans with bank accounts hardly save any money for that raining day. 

For example, most low and medium income workers usually blame their meagre earnings on their ability to save extra cash. What’s there to save after most of their fortnightly wages are spent on food and other necessities? The high cost of living, especially in the cities and towns, further impede their capacity to save.

That is not to imply that Papua New Guineans lack the ability to save money because there are other citizens, both low and high income earners, who do go out of their way to maintain healthy bank accounts.

Nonetheless, the savings culture is not a concept that can be engrained overnight as it takes generations to grow and nurture. The seed was planted by the Bank of NSW and the Commonwealth Bank of Australia before independence but their successors have not actively promoted the concept, which resulted in the lack of awareness and ignorance among the new generation since then.

The banking industry finally woke up from its long slumber last year with the announcement by the Bank of Papua New Guinea (BPNG) to promote the concept with a “savings campaign for young minds”.

Having taken the initiative, the central bank looked to the commercial banks to walk the talk as the campaign would not only benefit their businesses and the industry but educate our young citizens to save money for their future.

Therefore, it is most encouraging to note that Bank South Pacific (BSP), the country’s largest commercial bank, is supporting the BPNG initiative by embarking on an aggressive campaign of its own to promote the savings culture among young children and teenagers. 

The bank has launched two innovative savings accounts – Kids Savings account for young children in elementary and lower primary schools and the Sumatin account for students in upper primary and high schools as well as tertiary institutions, including the universities. The two accounts are free of all bank service charges.

BSP officers are visiting primary schools in the National Capital District to help children open their Kids Savings accounts. Last Saturday, two BSP officers were greeted with much interest by children and their parents at the Gerehu Primary School. After several hours, many children were still standing in the long queue to open their bank accounts and were even prepared to wait all day for this opportunity.

The enthusiasm shown by these children proves that the new generation of Papua New Guineans will have little or no difficulty in adapting to this foreign culture of saving surplus money for their future. Indeed, money talks but the trick is to hold onto it long enough to hear what it is saying. That’s the purpose of savings.