Bank access to more people

 THE Bank of Papua New Guinea and its partners are aiming to increase access to financial services for the people and ensure they use the services well.

The bank is doing this through the development of microfinance, promoting mobile and electronic banking, national payment systems, financial literacy programmes, micro insurance and other private sector initiatives on financial inclusions.

Governor for BPNG Loi Bakani told the Financial Inclusion Expo last week in Kokopo that it was common in the region that due to the limited number of financial service providers, a mismatch existed between demand and supply for financial services where the wider segment of the community was financially excluded.

He said formal financial services were often out of reach because of the difficulties faced by mainstream financial institutions in reaching harder areas.

Bakani said BPNG was encouraging the establishment of microfinance and savings and loans societies and other financial institutions in strategic geographical locations that could reach out to this segment of the population. 

It the same time it could appropriately tailor financial products for the lower end of the population to ensure the objective of accessibility and market penetration were achieved while making enough profit to sustain  operation.

Bakani said over the last five years, micro banks and their branches increased to five authorised microfinance institutions that had   seen an increase of 5.2% in the number of microbank branches, from 17 to 27 and agents from 68 to 771, representing 202% growth.

Bakani said that BPNG was   executing a microfinance expansion project (MEP) to build on from the experience and lessons learnt from the first phase and support further development of microfinance sector in PNG.

He said that some outcomes of this project would include a review of the microfinance regulatory framework for supervision of microfinance institutions, financial literacy to strengthen capacity of clients and potential clients to use microfinance services, improving technical capacity for partner financial institutions and risk share facility for access to finance by small and micro enterprises (SMEs).