No access to financial services

National, Normal
Source:

By PATRICK TALU

PAPUA New Guinea has one of the highest rates of financial exclusion (92%) in the world where people have no access to formal financial services.
Most of the people in the informal economy or sector have no access to saving accounts, payments and remittance, micro-insurance and micro-credit, according to University of Papua New (UPNG) academic Dr John Conroy.
Dr Conroy, in presenting the finding of his survey at the PNG update seminar last Friday, said the informal economy covered people who earned without a job and without paying income tax.
“They are in various informal self-employment and household-based activities where the time is unstructured and they are without rights or protection,” he said.
Dr Conroy said the formal economy covered people who worked for wages in both public and private sector where they pay taxes and what they produce was counted in the gross domestic product.
They are also counted in the workforce where their time is structured and have legal protections and right.
Dr Conroy said though the Informal Sector Act 2004 was in place, the central economic policy agencies did not seem to accept responsibility for the growth and diversification of the informal economy.
He said the informal sector was here to stay because the people did not have the financial inclusion from the formal economy.
“The informal economy is the result of activity of many people and it’s not going away. It is driven by poverty and market forces and not by the commands of the government.
“If the Government can’t stop it, how can the Government start it?” he asked.