Bakani: Micro Finance is essential

By GYNNIE KERO

AN appropriate policy instrument for achieving greater financial inclusion in PNG is micro finance, according to Bank of PNG Governor Loi Bakani.

He said this when handing over K25,000 to the Institute of National Affairs (INA) as its annual membership contribution.

Bakani thanked INA for being a key partner.

He said the agency depended on external sources to support its yearly activities in the country.

He stressed that 92% of the population had no access to formal financial services and this suggested the need for progressively rising levels of financial inclusion as a major economic policy objective.

In collaboration with BPNG, INA will conduct a survey on areas such as what goods and services are needed and how these can be made available to those in the informal economy.

Two measures to increase the financial inclusion of the population are the telecommunications policy, and provision of complementary government services to households involved in informal economic activities.

"These (micro finance) institutions in the country have developed the capacity to provide the financial services needed by households in the informal economy," Bakani said.

"Access to savings services is the most important of these and is most valued by low- income people in PNG."

Three leading microfinance institutions in the country are PNG Microfinance Ltd, Nationwide Microbank and Kokopo Microfinance with two more waiting for operation licences.