Financial illiteracy worries bank team leader

FARMERS and the rural people of Papua New Guinea have little or no knowledge about depositing their earnings into a bank or to operate a savings account to save money for future use, says a bank employee.
MiBank Esiloan team leader Mary Nila said this was mainly because nearly all rural farmers in Papua New Guinea were not educated to levels where they could easily and effectively communicate and understand financial literacies now being promoted and disseminated.
“Papua New Guinea’s unbanked population is so huge; we have observed a connection between financial literacy and the savings culture.
Nila said the many groups the banks deal with, especially rural farmers, lacked basic financial knowledge.
She said basic financial knowledge, such as in savings, was necessary for every individual and household.
“MiBank’s focus when conducting awareness has been to explain the benefits of savings in very simple terms for our people to understand,” Nila said.
“Financial literacy helps people understand the purpose of opening an account.
“We tell them that savings can be for unplanned events such as emergencies and deaths, or for planned expenses such as school fees.
“The bottom line is that, we tell farmers, to borrow money is only incurring a debt on your family.”
Nila said the bank, in partnership with USAid’s Lukautim Graun programme, recently conducted two days of training for interested groups that had approached them. After the training, participants opened their bank accounts.
She said MiBank’s requirements to open a new account were flexible, so as to encourage more rural people to start banking.
She said partnering with commodity exporters such Outspan PNG was an example of simplifying banking requirements for cocoa farmers.
“In this case, cocoa farmers can just present a reference letter from Outspan and based on that, we easily open their accounts,” she said.
“Same for others such as women groups that can be identified and endorsed by their chairperson.”
Lending manager Michael Aniyeli said almost all farmers they deal with had no bank accounts.
“This can give you an idea of the high percentage of rural population that remain unbanked,” he said.
Aniyeli added that the banking sector had a huge task to bring more than 50 per cent of Papua New Guineans online so they could be able to enjoy the benefits of ease and convenience through banking.