Teaching children about saving

Editorial, Normal

The National, Monday February 29th, 2016

 PAPUA New Guineans have been exposed to the western concept of banking and finance since the first commercial bank opened its doors to the public in downtown Port Moresby more than 100 years ago.

The two young Australians who opened the first branch of the Bank of New South Wales (now Westpac) in Douglas Street on May 1, 1910, may or may not have realised the enormous potential of this country, which was yet to be fully discovered.

In the modern era, PNG has kept pace with the changes that have been taking place in the global banking industry. 

With the rapid development of information technology since the start of the new millennium, Papua New Guineans now enjoy banking services that are equal or similar to those offered anywhere in the world. 

From the early days of passbook and cheque accounts, major commercials banks in PNG now offer internet banking, credit cards and a wide network of ATMs (automated telling machines) and EFTPOS (electronic funds transfer at point of sale) facilities.

Despite the technological advances that have made banking services accessible at our finger tips, there is one concept of banking that is still foreign to most of our citizens. 

And that is the savings culture, which is part and parcel of successful banking but has yet to grow roots in this country.

For various reasons, a large number of Papua New Guineans with bank accounts hardly save any money for that raining day. 

For example, most low and medium income workers usually blame their meager earnings on their ability to save extra cash. 

What’s there to save after most of their fortnightly wages are spent on food and other necessities? 

The high costs of living, especially in the cities and towns, further impede their capacity to save.

That is not to imply that Papua New Guineans lack the ability to save money because there are other citizens, both low and high income earners, who do go out of their way to maintain healthy bank accounts.

Nonetheless, the savings culture is not a concept that can be engrained overnight as it takes generations to grow and nurture. 

The seed was planted by the Bank of NSW and the Commonwealth Bank of Australia prior to independence but their successors have not actively promoted the concept, which resulted in the lack of awareness and ignorance among the new generation since then.

The banking industry finally woke up from its long slumber with the announcement by the Bank of Papua New Guinea (BPNG) to promote the concept with a “savings campaign for young minds”.

Having taken the initiative, the central bank looked to the commercial banks to walk the talk as the campaign would not only benefit their businesses and the industry but also educate our young citizens to save money for their future.

Bank South Pacific (BSP), the country’s largest commercial bank has been leading the way with its own aggressive campaign to promote the savings culture among young children and teenagers. 

The bank launched two innovative savings accounts – Kids Savings account for young children in elementary and lower primary schools and the Sumatin account for students in upper primary and high schools as well as tertiary institutions, including the universities. 

The two accounts are free of all bank service charges.

BSP officers have been paying regular visits to primary schools in the National Capital District and other urban centres to help children open their Kids Savings accounts. 

The bank has reported that the enthusiasm shown by children in opening their saving accounts proves that the new generation of Papua New Guineans will have little or no difficulty in adapting to this foreign culture of saving surplus money for their future.

Other commercial banks such as Westpac have also launched special savings products which target young children and teenagers.

With the establishment of new banks such as Kina Bank, our children now have more avenues to learn to save money for a secure future.

Indeed, money talks but the trick is to hold onto it long enough to hear what it is saying. 

That is the real purpose of savings.