Banking sector assets worth about K35 billion: BPNG

The National Business

THE total asset value of the country’s banking sector is about K35 billion, according to the Bank of PNG (BPNG).
The figure is part of information on total assets by class of institutions as at the end of last September:

  • Total assets for life insurance companies is K244 million, representing 0.5 per cent;
  • commercial banks K35.502 billion which is 66.8 per cent;
  • superannuation companies K14.149billion representing 26.6 per cent;
  • finance companies K1.614billion, 3 per cent
  • micro banks K304 million which is 0.6 per cent; and,
  • savings & loans societies with K1,325 million, representing 2.5 per cent of the total financial system.

The Central Bank says these exclude general insurance, unlicensed money lenders and others.
Meanwhile, BPNG governor Loi Bakani said inclusive insurance was one of the key priority areas under the National Financial Inclusion Strategy 2016-2020 of PNG’s Financial Inclusion Agenda. Bakani noted that life insurance and insurance in general were not very well known types of financial products to PNG people, most of whom live in the rural areas.
“As a result, insurance products are the least sought after, compared to savings and loans or banking products,” he said.
“A small segment of our country’s population understand the importance of an insurance product and the benefits such product can provide to anyone who acquires it to protect oneself from an event of disaster or misfortunes.
“Insurance services are important elements in when it comes to risk management.
“In other countries, for example Fiji, the majority of the population have some form of access to insurance products and services.
“Unfortunately in PNG, insurance coverage is estimated to be around 2 to 3 per cent and is mainly in the formal sector.
“Insurance services for the informal sector and also for rural areas are almost non-existent.”
He said this market segment which comprise 85 per cent of the country’s workforce is untapped.