Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1694435136987.pdf (Vanuatu)
VANUATU NATIONAL FINANCIAL INCLUSION STRATEGY 2018 - 2023 RESERVE BANK OF VANUATU 4.

Vision, Mission and Objectives 4.

Vision, Mission and Objectives 4.

Vision, Mission and Objectives 4.
1 Vision 4.1 Vision Create an enabling environment for enriching the livelihoods of the people and MSMEs in Vanuatu through Create an enabling environment for enriching the livelihoods of the people and MSMEs in Vanuatu through inclusive financial services and consumer empowerment and protection.

inclusive financial services and consumer empowerment and protection.
4.2 Mission 4.2 Mission 4.2 Mission 4.2 Mission By 2023, By 2023, By 2023, By 2023,  Ensure an additional 54,000 (total of 130,000) adults will be active users of formal or semi-formal  Ensure an additional 54,000 (total of 130,000) adults will be active users of formal or semi-formal   Ensure an additional 54,000 (total of 130,000) adults will be active users of formal or semi-formal Ensure an additional 54,000 (total of 130,000) adults will be active users of formal or semi-formal financial services, of which 50% will be women.


financial services, of which 50% will be women.

financial services, of which 50% will be women.

Ensure 40% of the financially included will be active users.5 Ensure 40% of the financially included will be active users.5 Ensure 40% of the financially included will be active users.5  Ensure 40% of the financially included will be active users.
 Ensure a suite of MSME business financing products are available, which are tailored also to the needs  Ensure a suite of MSME business financing products are available, which are tailored also to the needs  Ensure a suite of MSME business financing products are available, which are tailored also to the needs Ensure a suite of MSME business financing products are available, which are tailored also to the needs of businesses led by women and youth of businesses led by women and youth of businesses led by women and youth of businesses led by women and youth     4.3 Objectives 4.3 Objectives 4.3.1 4.3.1 4.3 Objectives 4.3 Objectives 4.3.1 4.3.1 To facilitate an enabling regulatory and supervisory environment for providers and users of financial To facilitate an enabling regulatory and supervisory environment for providers and users of financial To facilitate an enabling regulatory and supervisory environment for providers and users of financial To facilitate an enabling regulatory and supervisory environment for providers and users of financial services.
services.

services.

services.

To enable the people and MSMEs in Vanuatu to have access to a range of appropriate and sustainable To enable the people and MSMEs in Vanuatu to have access to a range of appropriate and sustainable To enable the people and MSMEs in Vanuatu to have access to a range of appropriate and sustainable To enable the people and MSMEs in Vanuatu to have access to a range of appropriate and sustainable financial services at an affordable cost.


financial services at an affordable cost.

financial services at an affordable cost.


To foster financial inclusion deepening and resilience via increased and regular usage of financial To foster financial inclusion deepening and resilience via increased and regular usage of financial To foster financial inclusion deepening and resilience via increased and regular usage of financial To foster financial inclusion deepening and resilience via increased and regular usage of financial services.

services.

services.

services.
To strengthen the financial competencies of the people of Vanuatu to enable better informed financial To strengthen the financial competencies of the people of Vanuatu to enable better informed financial To strengthen the financial competencies of the people of Vanuatu to enable better informed financial To strengthen the financial competencies of the people of Vanuatu to enable better informed financial decision making together with the optimal use of financial services to better their livelihoods.


decision making together with the optimal use of financial services to better their livelihoods.

decision making together with the optimal use of financial services to better their livelihoods.
To facilitate consumer protection of consumers of financial services and for MSME finance To facilitate consumer protection of consumers of financial services and for MSME finance To facilitate consumer protection of consumers of financial services and for MSME finance To facilitate consumer protection of consumers of financial services and for MSME finance To use a multi-stakeholder and multi-sector approach to enable a concerted and comprehensive To use a multi-stakeholder and multi-sector approach to enable a concerted and comprehensive To use a multi-stakeholder and multi-sector approach to enable a concerted and comprehensive To use a multi-stakeholder and multi-sector approach to enable a concerted and comprehensive national approach to addressing financial exclusion.


national approach to addressing financial exclusion.

national approach to addressing financial exclusion.
To promote the development in the MSME sector to improve financial users’ income To promote the development in the MSME sector to improve financial users’ income To promote the development in the MSME sector to improve financial users’ income To promote the development in the MSME sector to improve financial users’ income 4.3.2 4.3.2 4.3.2 4.3.2 4.3.3 4.3.3 4.3.3 4.3.3 4.3.4 4.3.4 4.3.4 4.3.4 4.3.5 4.3.5 4.3.6 4.3.6 4.3.5 4.3.5 4.3.6 4.3.6 4.3.7 4.3.7 4.3.7 4.3.7 5 Active users conduct at least one transaction within a 90 day period.


5 Active users conduct at least one transaction within a 90 day period.

5 Active users conduct at least one transaction within a 90 day period.
22 | P a g e 22 | P a g e 22 | P a g e 22 | P a g e Foreword Foreword Foreword It is a pleasure to present this report of the first ever, nationwide survey conducted on Micro, It is a pleasure to present this report of the first ever, nationwide survey conducted on Micro, It is a pleasure to present this report of the first ever, nationwide survey conducted on Micro, Foreword Small and Medium-Sized Enterprises (MSMEs) by the RBV as part of its financial inclusion Small and Medium-Sized Enterprises (MSMEs) by the RBV as part of its financial inclusion Small and Medium-Sized Enterprises (MSMEs) by the RBV as part of its financial inclusion agenda in Vanuatu.
Let me state at the outset that the lack of past surveys on a national scale, agenda in Vanuatu.

Let me state at the outset that the lack of past surveys on a national scale, agenda in Vanuatu.
Let me state at the outset that the lack of past surveys on a national scale, It is a pleasure to present this report of the first ever, nationwide survey conducted on Micro, Small and comprehensive database on MSMEs in Vanuatu, posed challenges in the initial survey design and comprehensive database on MSMEs in Vanuatu, posed challenges in the initial survey design and comprehensive database on MSMEs in Vanuatu, posed challenges in the initial survey design and Medium-Sized Enterprises (MSMEs) by the RBV as part of its financial inclusion agenda in Vanuatu.
and the conduct of the survey itself.

I am proud we overcame those challenges and are able to and the conduct of the survey itself.

I am proud we overcame those challenges and are able to and the conduct of the survey itself.
I am proud we overcame those challenges and are able to Let me state at the outset that the lack of past surveys on a national scale, and comprehensive database present in this report, important findings which will serve as input to formulating our medium to present in this report, important findings which will serve as input to formulating our medium to present in this report, important findings which will serve as input to formulating our medium to on MSMEs in Vanuatu, posed challenges in the initial survey design and the conduct of the survey itself.
long-term policies on SMEs as part of the financial inclusion agenda in Vanuatu.

As part of this long-term policies on SMEs as part of the financial inclusion agenda in Vanuatu.

As part of this long-term policies on SMEs as part of the financial inclusion agenda in Vanuatu.
As part of this I am proud we overcame those challenges and are able to present in this report, important findings Foreword process, the Reserve Bank will consult with the public concerning the findings of the survey with process, the Reserve Bank will consult with the public concerning the findings of the survey with process, the Reserve Bank will consult with the public concerning the findings of the survey with which will serve as input to formulating our medium to long-term policies on SMEs as part of the Foreword a view to incorporating those views in our future policies on SMEs.
The survey will therefore a view to incorporating those views in our future policies on SMEs.

The survey will therefore a view to incorporating those views in our future policies on SMEs.

The survey will therefore financial inclusion agenda in Vanuatu.
As part of this process, the Reserve Bank will consult with the The Vanuatu National Financial Inclusion Strategy 2018 – 2023 is the policy document that provides the road enhance evidence-based policy solutions to address gaps in the financial inclusion agenda in Foreword enhance evidence-based policy solutions to address gaps in the financial inclusion agenda in enhance evidence-based policy solutions to address gaps in the financial inclusion agenda in public concerning the findings of the survey with a view to incorporating those views in our future map of the financial inclusion journey with the ultimate aim of improving access to and usage of appropriate The Vanuatu National Financial Inclusion Strategy 2018 – 2023 is the policy document that provides the road Vanuatu.
Vanuatu.

Vanuatu.

financial services by the underserved adult population and micro small and medium enterprises in Vanuatu.

It policies on SMEs.


The survey will therefore enhance evidence-based policy solutions to address gaps Foreword map of the financial inclusion journey with the ultimate aim of improving access to and usage of appropriate The Vanuatu National Financial Inclusion Strategy 2018 – 2023 is the policy document that provides the road provides an important means to improve livelihoods, strengthen financial resilience and provides an avenue for in the financial inclusion agenda in Vanuatu.
The objectives of the survey were to produce evidence for access and usage of financial The objectives of the survey were to produce evidence for access and usage of financial The objectives of the survey were to produce evidence for access and usage of financial financial services by the underserved adult population and micro small and medium enterprises in Vanuatu.
It map of the financial inclusion journey with the ultimate aim of improving access to and usage of appropriate the ni-Vanuatu to better able to save for the future, invest to generate income and insure against unforeseen Foreword The Vanuatu National Financial Inclusion Strategy 2018 – 2023 is the policy document that provides the road services of the business sector in urban centers and the rural sector, particularly the MSME services of the business sector in urban centers and the rural sector, particularly the MSME services of the business sector in urban centers and the rural sector, particularly the MSME The objectives of the survey were to produce evidence for access and usage of financial services financial services by the underserved adult population and micro small and medium enterprises in Vanuatu.
It provides an important means to improve livelihoods, strengthen financial resilience and provides an avenue for events.
Because these goals are multifaceted their success and the barriers to achieve a more financially map of the financial inclusion journey with the ultimate aim of improving access to and usage of appropriate provides an important means to improve livelihoods, strengthen financial resilience and provides an avenue for component, to complement the current indicators which utilize supply-side data.
It also the ni-Vanuatu to better able to save for the future, invest to generate income and insure against unforeseen component, to complement the current indicators which utilize supply-side data.

It also The Vanuatu National Financial Inclusion Strategy 2018 – 2023 is the policy document that provides the road map component, to complement the current indicators which utilize supply-side data.
It also of the business sector in urban centers and the rural sector, particularly the MSME component, to inclusive society can only be attained with the support and collaboration of the different stakeholders.

This financial services by the underserved adult population and micro small and medium enterprises in Vanuatu.
It the ni-Vanuatu to better able to save for the future, invest to generate income and insure against unforeseen of the financial inclusion journey with the ultimate aim of improving access to and usage of appropriate financial events.
Because these goals are multifaceted their success and the barriers to achieve a more financially complements the Financial Inclusion Demand-Side Survey which measured and provided complements the Financial Inclusion Demand-Side Survey which measured and provided complements the Financial Inclusion Demand-Side Survey which measured and provided complement the current indicators which utilize supply-side data.
It also complements the Financial cooperation will be critical in the period ahead because of the different sphere of responsibilities of different provides an important means to improve livelihoods, strengthen financial resilience and provides an avenue for services by the underserved adult population and micro small and medium-sizes enterprises (MSMEs) in Vanuatu.

events.
events.

Because these goals are multifaceted their success and the barriers to achieve a more financially inclusive society can only be attained with the support and collaboration of the different stakeholders.

This indicators for access and usage of financial services from the perspective of the adult Ni- agencies and policy makers within the financial inclusion agenda.
There is need therefore to recognize this indicators for access and usage of financial services from the perspective of the adult Ni- indicators for access and usage of financial services from the perspective of the adult Ni- Inclusion Demand-Side Survey which measured and provided indicators for access and usage of the ni-Vanuatu to better able to save for the future, invest to generate income and insure against unforeseen It provides an important means to improve livelihoods, strengthen financial resilience and provides an avenue for inclusive society can only be attained with the support and collaboration of the different stakeholders.
This cooperation will be critical in the period ahead because of the different sphere of responsibilities of different shared responsibility among the different stakeholders for the common good of the ni-Vanuatu.

Vanuatu.

Vanuatu.

Vanuatu.

financial services from the perspective of the adult Ni-Vanuatu.

events.
events.

Because these goals are multifaceted their success and the barriers to achieve a more financially the ni-Vanuatu to better able to save for the future, invest to generate income and insure against unforeseen cooperation will be critical in the period ahead because of the different sphere of responsibilities of different agencies and policy makers within the financial inclusion agenda.

There is need therefore to recognize this events.


Because these goals are multifaceted their success and the barriers to achieve a more financially inclusive inclusive society can only be attained with the support and collaboration of the different stakeholders.

This agencies and policy makers within the financial inclusion agenda.
There is need therefore to recognize this The survey provided information on the usage of certain basic financial services such as savings, The survey provided information on the usage of certain basic financial services such as savings, The survey provided information on the usage of certain basic financial services such as savings, shared responsibility among the different stakeholders for the common good of the ni-Vanuatu.
The survey provided information on the usage of certain basic financial services such as savings, credit, society can only be attained with the support and collaboration of the different stakeholders.
This cooperation cooperation will be critical in the period ahead because of the different sphere of responsibilities of different The development of the financial inclusion strategy drew from lessons, experiences and best practices around shared responsibility among the different stakeholders for the common good of the ni-Vanuatu.
will be critical in the period ahead because of the different sphere of responsibilities of different agencies and credit, investment, insurance and the application of technology to business operation of MSMEs credit, investment, insurance and the application of technology to business operation of MSMEs credit, investment, insurance and the application of technology to business operation of MSMEs investment, insurance and the application of technology to business operation of MSMEs in Vanuatu.
It agencies and policy makers within the financial inclusion agenda.

There is need therefore to recognize this the world and particularly from among the Pacific island countries.

But more importantly, it reflected the policy makers within the financial inclusion agenda.
There is need therefore to recognize this shared responsibility The development of the financial inclusion strategy drew from lessons, experiences and best practices around shared responsibility among the different stakeholders for the common good of the ni-Vanuatu.

in Vanuatu.

It provided understanding of the main profiles of MSMEs and the gender in Vanuatu.

It provided understanding of the main profiles of MSMEs and the gender in Vanuatu.
It provided understanding of the main profiles of MSMEs and the gender provided understanding of the main profiles of MSMEs and the gender characteristics of the MSME aspirations and needs of the ni-Vanuatu.

The baseline data of the 2016 nationally-represented financial The development of the financial inclusion strategy drew from lessons, experiences and best practices around among the different stakeholders for the common good of the ni-Vanuatu.
the world and particularly from among the Pacific island countries.

But more importantly, it reflected the the world and particularly from among the Pacific island countries.

But more importantly, it reflected the characteristics of the MSME sector in Vanuatu.

Finally, it identified the main barriers that inclusion demand side survey, provided data on access and usage of financial services, determined the need for characteristics of the MSME sector in Vanuatu.
Finally, it identified the main barriers that characteristics of the MSME sector in Vanuatu.

Finally, it identified the main barriers that sector in Vanuatu.

Finally, it identified the main barriers that prevented MSMEs from accessing and The development of the financial inclusion strategy drew from lessons, experiences and best practices around aspirations and needs of the ni-Vanuatu.

The baseline data of the 2016 nationally-represented financial aspirations and needs of the ni-Vanuatu.
The baseline data of the 2016 nationally-represented financial The development of the financial inclusion strategy drew from lessons, experiences and best practices around the a suite of financial services, provided a profile of the different users of financial services and identified the main prevented MSMEs from accessing and using financial products and services.

prevented MSMEs from accessing and using financial products and services.


using financial products and services.

the world and particularly from among the Pacific island countries.

But more importantly, it reflected the inclusion demand side survey, provided data on access and usage of financial services, determined the need for world and particularly from among the Pacific island countries.
But more importantly, it reflected the aspirations inclusion demand side survey, provided data on access and usage of financial services, determined the need for barriers to access and usage of financial services for individuals in Vanuatu.

Furthermore, the strategies were aspirations and needs of the ni-Vanuatu.

The baseline data of the 2016 nationally-represented financial and needs of the ni-Vanuatu.
The baseline data of the 2016 nationally-represented financial inclusion demand side a suite of financial services, provided a profile of the different users of financial services and identified the main The survey shows that a high percentage of businesses accessed informal financing sources for The survey shows that a high percentage of businesses accessed informal financing sources for a suite of financial services, provided a profile of the different users of financial services and identified the main The survey shows that a high percentage of businesses accessed informal financing sources for The survey shows that a high percentage of businesses accessed informal financing sources for business developed from consultation with relevant key financial inclusion stakeholders, including the Government and inclusion demand side survey, provided data on access and usage of financial services, determined the need for survey, provided data on access and usage of financial services, determined the need for a suite of financial barriers to access and usage of financial services for individuals in Vanuatu.
Furthermore, the strategies were barriers to access and usage of financial services for individuals in Vanuatu.

Furthermore, the strategies were business startups even though the sector remains largely unsupervised in Vanuatu.

The business startups even though the sector remains largely unsupervised in Vanuatu.

The business startups even though the sector remains largely unsupervised in Vanuatu.

The startups even though the sector remains largely unsupervised in Vanuatu.
The participation of women those with the Financial Inclusion Taskforce (FIT).
services, provided a profile of the different users of financial services and identified the main barriers to access and a suite of financial services, provided a profile of the different users of financial services and identified the main developed from consultation with relevant key financial inclusion stakeholders, including the Government and developed from consultation with relevant key financial inclusion stakeholders, including the Government and participation of women and youth in total businesses ownership is lower than among men.


participation of women and youth in total businesses ownership is lower than among men.

and youth in total businesses ownership is lower than among men.

Women ownership amounts to around usage of financial services for individuals in Vanuatu.

Furthermore, the strategy was developed from consultation barriers to access and usage of financial services for individuals in Vanuatu.
Furthermore, the strategies were those with the Financial Inclusion Taskforce (FIT).

those with the Financial Inclusion Taskforce (FIT).
with relevant key financial inclusion stakeholders, including the Government and those within the private sector, The strategy provides the means to achieving the vision of creating an enabling environment that will lead to Women ownership amounts to around 20 percent, indicating a gap from the target of 30 Women ownership amounts to around 20 percent, indicating a gap from the target of 30 Women ownership amounts to around 20 percent, indicating a gap from the target of 30 20 percent, indicating a gap from the target of 30 percent under the Maya Declaration.
Access to developed from consultation with relevant key financial inclusion stakeholders, including the Government and financial services provides and other agencies.

A nationally represented MSME survey conducted by the RBV enriching the livelihoods of the people and MSMEs in Vanuatu through more inclusive financial services and those with the Financial Inclusion Taskforce (FIT).

percent under the Maya Declaration.


Access to finance for business financing is perceived as a percent under the Maya Declaration.

Access to finance for business financing is perceived as a percent under the Maya Declaration.

Access to finance for business financing is perceived as a finance for business financing is perceived as a major problem in Vanuatu.
Lack of infrastructure, The strategy provides the means to achieving the vision of creating an enabling environment that will lead to towards the end of 2016 provided data on access and usage of financial services by MSMEs.
The strategy provides the means to achieving the vision of creating an enabling environment that will lead to consumer empowerment and protection and will in itself, be an important guide for the Government, the RBV, enriching the livelihoods of the people and MSMEs in Vanuatu through more inclusive financial services and major problem in Vanuatu.

Lack of infrastructure, inefficient government service delivery, major problem in Vanuatu.
Lack of infrastructure, inefficient government service delivery, inefficient government service delivery, competition from cheap imported products/services, small enriching the livelihoods of the people and MSMEs in Vanuatu through more inclusive financial services and The strategy provides the means to achieving the vision of creating an enabling environment that will lead to the FIT, and important financial inclusion stakeholders in Vanuatu.
Its goals are to facilitate an enabling consumer empowerment and protection and will in itself, be an important guide for the Government, the RBV, The strategy provides the means to achieving the vision of creating an enabling environment that will lead to competition from cheap imported products/services, small market size and lack of support competition from cheap imported products/services, small market size and lack of support competition from cheap imported products/services, small market size and lack of support market size and lack of support services for business development are key problems faced by the enriching the livelihoods of the people and MSMEs in Vanuatu through more inclusive financial services and consumer empowerment and protection and will in itself, be an important guide for the Government, the RBV, the FIT, and important financial inclusion stakeholders in Vanuatu.
Its goals are to facilitate an enabling enriching the livelihoods of the people and MSMEs in Vanuatu through more inclusive financial services and regulatory and supervisory environment, enhance access and usage of financial services, foster financial services for business development are key problems faced by the MSME businesses sector.

services for business development are key problems faced by the MSME businesses sector.


MSME businesses sector.

consumer empowerment and protection and will in itself, be an important guide for the Government, the RBV, the FIT, and important financial inclusion stakeholders in Vanuatu.
Its goals are to facilitate an enabling consumer empowerment and protection and will in itself, be an important guide for the Government, the RBV, the regulatory and supervisory environment, enhance access and usage of financial services, foster financial deepening, strengthen financial competencies of financial services users, facilitate consumer protection and the FIT, and important financial inclusion stakeholders in Vanuatu.
Its goals are to facilitate an enabling NFIC, and important financial inclusion stakeholders in Vanuatu.

Its goals are to facilitate an enabling regulatory deepening, strengthen financial competencies of financial services users, facilitate consumer protection and regulatory and supervisory environment, enhance access and usage of financial services, foster financial enable a more concerted and comprehensive approach to address financial exclusion.
It has four key priority I would like to thank the Alliance for Financial inclusion (AFI) for providing grant funding which I would like to thank the Alliance for Financial inclusion (AFI) for providing grant funding which I would like to thank the Alliance for Financial inclusion (AFI) for providing grant funding which I would like to thank the Alliance for Financial inclusion (AFI) for providing grant funding which enabled and supervisory environment, enhance access and usage of financial services, foster financial deepening, regulatory and supervisory environment, enhance access and usage of financial services, foster financial enable a more concerted and comprehensive approach to address financial exclusion.
It has four key priority deepening, strengthen financial competencies of financial services users, facilitate consumer protection and areas that are critical to achieving progress in the financial inclusion agenda in Vanuatu.

enabled the survey to be successfully carried out.

I also thank the survey Technical Committee enabled the survey to be successfully carried out.

I also thank the survey Technical Committee enabled the survey to be successfully carried out.
I also thank the survey Technical Committee the survey to be successfully carried out.

I also thank the survey Technical Committee which was strengthen financial competencies of financial services users, facilitate consumer protection and enable a more deepening, strengthen financial competencies of financial services users, facilitate consumer protection and areas that are critical to achieving progress in the financial inclusion agenda in Vanuatu.
enable a more concerted and comprehensive approach to address financial exclusion.

It has four key priority concerted and comprehensive approach to address financial exclusion.
It has four key priority areas that are critical which was responsible for every aspect of the survey – developing survey instruments, sample which was responsible for every aspect of the survey – developing survey instruments, sample which was responsible for every aspect of the survey – developing survey instruments, sample responsible for every aspect of the survey – developing survey instruments, sample design, piloting, enable a more concerted and comprehensive approach to address financial exclusion.
It has four key priority areas that are critical to achieving progress in the financial inclusion agenda in Vanuatu.

I am grateful for the commitment of the stakeholders during the consultation phase and look forward to the to achieving progress in the financial inclusion agenda in Vanuatu.

areas that are critical to achieving progress in the financial inclusion agenda in Vanuatu.

design, piloting, field survey, data cleaning, assessment, and for putting the report together.
I design, piloting, field survey, data cleaning, assessment, and for putting the report together.

I design, piloting, field survey, data cleaning, assessment, and for putting the report together.

I field survey, data cleaning, assessment, and for putting the report together.

I also acknowledge I am grateful for the commitment of the stakeholders during the consultation phase and look forward to the role they will play in the future in the implementation of the strategy.
Finally, I wish to sincerely thank the role they will play in the future in the implementation of the strategy.
Finally, I wish to sincerely thank the also acknowledge contributions to the survey by various staff and Directors of the Reserve Bank also acknowledge contributions to the survey by various staff and Directors of the Reserve Bank also acknowledge contributions to the survey by various staff and Directors of the Reserve Bank contributions to the survey by various staff and Directors of the Reserve Bank of Vanuatu.
Finally, I I am grateful for the commitment of the stakeholders during the consultation phase and look forward to the role I am grateful for the commitment of the stakeholders during the consultation phase and look forward to the Reserve Bank of Vanuatu Technical Committee on Financial Inclusion and the Pacific Financial Inclusion Program I am grateful for the commitment of the stakeholders during the consultation phase and look forward to the Reserve Bank of Vanuatu Technical Committee on Financial Inclusion and the Pacific Financial Inclusion Program they will play in the future in the implementation of the strategy.
Finally, I wish to sincerely thank the Reserve Bank of Vanuatu.

Finally, I offer a special thank you to all who welcomed the MSME Survey team of Vanuatu.

Finally, I offer a special thank you to all who welcomed the MSME Survey team of Vanuatu.

Finally, I offer a special thank you to all who welcomed the MSME Survey team offer a special thank you to all who welcomed the MSME Survey team whole-heartedly and role they will play in the future in the implementation of the strategy.
Finally, I wish to sincerely thank the (PFIP), which is itself backed by the UNCDF, UNDP and the Alliance for Financial Inclusion (AFI) for the role they will play in the future in the implementation of the strategy.
Finally, I wish to sincerely thank the (PFIP), which is itself backed by the UNCDF, UNDP and the Alliance for Financial Inclusion (AFI) for the of Vanuatu Technical Committee on Financial Inclusion and the Pacific Financial Inclusion Program (PFIP), which is whole-heartedly and participated to make the survey a success.

whole-heartedly and participated to make the survey a success.

whole-heartedly and participated to make the survey a success.

participated to make the survey a success.
Reserve Bank of Vanuatu Technical Committee on Financial Inclusion and the Pacific Financial Inclusion Program Reserve Bank of Vanuatu Technical Committee on Financial Inclusion and the Pacific Financial Inclusion Program development of a comprehensive financial inclusion strategy which will form the key policy strategy in improving itself backed by the UNCDF, UNDP and the Alliance for Financial Inclusion (AFI) for the development of a development of a comprehensive financial inclusion strategy which will form the key policy strategy in improving (PFIP), which is itself backed by the UNCDF, UNDP and the Alliance for Financial Inclusion (AFI) for the (PFIP), which is itself backed by the UNCDF, UNDP and the Alliance for Financial Inclusion (AFI) for the comprehensive financial inclusion strategy which will form the key policy strategy in improving the livelihoods of the livelihoods of the ni-Vanuatu in the years ahead.


Governor Simeon Athy Governor Simeon Athy Governor Simeon Athy Governor Simeon Athy the ni-Vanuatu in the years ahead.

development of a comprehensive financial inclusion strategy which will form the key policy strategy in improving development of a comprehensive financial inclusion strategy which will form the key policy strategy in improving the livelihoods of the ni-Vanuatu in the years ahead.

the livelihoods of the ni-Vanuatu in the years ahead.
Simeon Malachi Athy Simeon Malachi Athy Governor Simeon Malachi Athy Governor Reserve Bank of Vanuatu Reserve Bank of Vanuatu Reserve Bank of Vanuatu Reserve Bank of Vanuatu Simeon Malachi Athy Reserve Bank of Vanuatu Governor Simeon Malachi Athy Reserve Bank of Vanuatu Reserve Bank of Vanuatu Governor Chairperson –Financial Inclusion Taskforce Governor Chairperson –Financial Inclusion Taskforce Chairperson –Financial Inclusion Taskforce Reserve Bank of Vanuatu Reserve Bank of Vanuatu Chairperson –Financial Inclusion Taskforce Chairperson –Financial Inclusion Taskforce iii ii ii ii 1 | P a g e 1 | P a g e 1 | P a g e 1 | P a g e 1 | P a g e Reserve Bank of Vanuatu Financial Inclusion Commitments Maya Declaration Maya commitment made in 2012/Updated at 2015 AFI Global Policy Forum Thematic Area 1 National Financial Inclusion Strategy 2 Data and Measurement 3 Consumer Empowerment, Consumer Protection & Market Conduct Commitment – Concrete Target Council of Ministers to endorse the newly established National Financial Inclusion Strategy and the National Financial Inclusion Taskforce before quarter 1 of 2013.
Conduct survey on financial access and demand for financial services by end of 2014. Review legislation and regulation on use and delivery of financial services to strengthen client protection by end of 2014.

4 Financial Literacy 5 Overarching National Goal Incorporate financial education in the core school curriculum by 2013.

Expected to be completed by 2016.


To enable the increased access and usage of basic financial services like savings, micro-credit, micro- insurance, remittances and a range of appropriate and affordable finance to MSME businesses.
The overall goal is to cover additional 76,000 unbanked Ni-Vanuatu (at least 38,000 to be women) by December 2016, through a nationally coordinated effort, in partnership with a range of service providers and relevant government institutions, offering a broad range of relevant and cost effective financial services.

* Informed by Alliance for Financial Inclusion 2016 Maya Declaration Progress Report.

Current Status Completed* Completed June 2016 and launched 2017.
Being pursued at the regional level via PIRI.

A draft regulation is in place for PIRI members.

Further, the draft Vanuatu National Competition Policy (CP) is currently under consultation.

The CP for the banking & insurance industries is the 9th priority area within.

FinEd integrated within Year 1-3 core curriculum.

Not yet achieved.

According to the Vanuatu 2016 Mini Census report a total of 63,224 of the total adult population are banked, of which 26,985 are women.

Included in NFIS 2018- 2023.


2 | P a g e Additional Maya commitments made at 2016 AFI Global Policy Forum 1 Thematic Area Financial inclusion of Women in MSME Finance Commitment – Concrete Target Put in place policies to support access for MSMEs, targeting 30% women.
Current Status Included in NFIS 2018 - 2023 2 Consumer Protection 3 Consumer Protection in MSME Finance Implement a Secured Transaction Act Promote consumer protection and empowerment specific to MSME finance Completed Included in NFIS 2018 - 2023 Money Pacific Goals 2020 In 2009, the Reserve Bank of Vanuatu joined 7 Pacific central bank governors and endorsed the following Money Pacific 2020 regional goals, whilst making a commitment to lead action on building financial competency within individual countries.
2020 Money Pacific Goals In each Pacific Island nation by 2020, through the combined actions of public and private sectors, our goals are:  All school children to receive financial education through core curricula.

 All adults to have access to financial education.

 Simple and transparent consumer protection to be in place.

 To halve the number of households without access to basic financial services.
Maputo Accord In 2015 the RBV made a commitment during the Alliance for Financial Inclusion Global Policy Forum held in Mozambique, to become a member of the AFI’s Small and Medium Enterprises Finance Working Group.
The commitment included putting in place policies to support SMEs, the implementation of the Personal Properties Securities Act (Secured Transaction Act), review of legislations and regulations to strengthen client protection and empowerment, and market conduct in relation to the use and the delivery of financial services for SMEs.
Denarau Accord At the 2016 Alliance for Financial Inclusion Global Policy Forum held in Fiji, the Reserve Bank of Vanuatu joined other countries in agreeing to work towards addressing the gender gap in financial inclusion.
3 | P a g e Table of Contents LIST OF ACRONYMS AND ABBREVIATIONS USED ........................................................................................................ 6 ACKNOWLEDGEMENT ................................................................................................................................................ 8 EXECUTIVE SUMMARY ................................................................................................................................................ 9 FIGURES .................................................................................................................................................................... 10 1.
BACKGROUND .................................................................................................................................................... 11 2.

GUIDING PRINCIPLES .......................................................................................................................................... 12 3.
FINANCIAL INCLUSION IN VANUATU .................................................................................................................. 13 3.1 FINANCIAL INCLUSION STRAND ................................................................................................................................... 13 3.2 SAVINGS ................................................................................................................................................................ 14 3.3 CREDIT .................................................................................................................................................................. 14 3.4 BANK ACCOUNT USAGE ............................................................................................................................................ 14 3.5 INSURANCE ............................................................................................................................................................ 15 3.6 REMITTANCES ......................................................................................................................................................... 16 3.8 FINANCIAL INCLUSION STRAND FOR MSME FINANCING ................................................................................................. 18 3.9 MSME: ACCESS TO CREDIT FOR BUSINESS START-UP ..................................................................................................... 19 3.10 MSME: ACCESS TO CREDIT FOR BUSINESS FINANCING ................................................................................................. 19 3.11 MSME: APPLICATION FOR AND USE OF CREDIT .......................................................................................................... 20 3.12 MSME: USAGE OF CREDIT FOR BUSINESS FINANCING .................................................................................................. 20 3.13 MSME: PAYMENT INSTRUMENTS ............................................................................................................................ 21 3.14 MSME: INTERNET BANKING ................................................................................................................................... 21 3.16 GENDER IN BUSINESS ............................................................................................................................................. 22 4.
VISION, MISSION AND OBJECTIVES ..................................................................................................................... 23 4.1 VISION .................................................................................................................................................................. 23 4.2 MISSION ................................................................................................................................................................ 23 4.3 OBJECTIVES ........................................................................................................................................................ 23 5.
FINANCIAL INCLUSION STRATEGY 2018 – 2023 .................................................................................................. 24 STRATEGIC GOAL 1 – CREATE AN ENABLING POLICY ENVIRONMENT AND FINANCIAL INFRASTRUCTURE ................................ 24 5.1 STRATEGIC GOAL 2 – PROMOTE AND FOSTER INCLUSIVE PRODUCTS, SERVICES AND CHANNELS .......................................... 25 5.2 STRATEGIC GOAL 3 - MICRO, SMALL AND MEDIUM ENTERPRISE FINANCING .................................................................. 25 5.3 STRATEGIC GOAL 4 - FINANCIAL LITERACY AND CONSUMER EMPOWERMENT ................................................................. 26 5.4 STRATEGIC GOALS AND ACTION PLAN ..................................................................................................................... 27 5.5 GOAL 1: CREATE AN ENABLING POLICY ENVIRONMENT AND FINANCIAL INFRASTRUCTURE ........................................................... 27 GOAL 2: PROMOTE AND FOSTER INCLUSIVE PRODUCTS, SERVICES AND CHANNELS ..................................................................... 29 4 | P a g e GOAL 3: MICRO, SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ........................................................................................ 31 GOAL 4 - FINANCIAL LITERACY AND CONSUMER EMPOWERMENT ........................................................................................... 34 6.
STAKEHOLDERS ................................................................................................................................................... 35 7.
COORDINATION, MONITORING AND EVALUATION ............................................................................................ 37 7.1 COORDINATION ...................................................................................................................................................... 37 7.2 MONITORING AND EVALUATION FRAMEWORK ............................................................................................................. 39 ANNEX 1: KEY EVALUATION INDICATORS ................................................................................................................. 40 1.1 ACCESS CHANNELS BY URBAN AND RURAL ................................................................................................................... 40 1.2 ACCESS CHANNELS BY GENDER ................................................................................................................................. 40 1.3 USAGE ACCOUNTS AND CHANNELS ............................................................................................................................. 40 ANNEX 2: NFIC, FIT AND WORKING GROUP REPRESENTATIVES ............................................................................... 41 2.1 NFIC MEMBERS ..................................................................................................................................................... 41 2.2 FIT MEMBERS ....................................................................................................................................................... 41 2.3 REGULATORY WORKING GROUP ................................................................................................................................ 41 2.4 INCLUSIVE PRODUCTS AND SERVICES WORKING GROUP ................................................................................................. 41 2.5 MSME FINANCE WORKING GROUP ........................................................................................................................... 42 2.6
42 2.6 FINANCIAL LITERACY AND CONSUMER EMPOWERMENT WORKING GROUP ........................................................................ 42 5 | P a g e List of Acronyms and Abbreviations Used Asian Development Bank Alliance for Financial Inclusion Anti-Money Laundering/Combating the Financing of Terrorism Australia and New Zealand Bank Corporation Automated Teller Machine (or) Automatic Teller Machine Bankers Association Vanuatu Branchless Banking Bred (Vanuatu) Ltd Bank of South Pacific Bred (Vanuatu) Limited Department of Agriculture & Rural Development Department of Local Authorities Domestic Money Transfer Department of Foreign Affairs & Trade, Australian Aid Program Digital Financial Services Demand Side Survey Electronic Funds Transfer at Point of Sale Financial Inclusion Taskforce Financial Service Providers Government-to-person Gross Domestic Product International Finance Corporation Know Your Customer Ministry of Agriculture, Livestock , Forestry, Fisheries and Biosecurity New Zealand Government’s Ministry for Foreign Affairs and Trade Ministry of Finance and Economic Management Microfinance Institution Mobile Financial Services Ministry of Justice and Community Services Mobile Money Mobile Network Operator Ministry of Education and Training Acronym ADB AFI AML/CFT ANZ ATM BAV BB BRED BSP BVL DARD DLA DMT DFAT DFS DSS EFTPOS FIT FSPs G2P GDP IFC KYC MALFFB MFAT MFEM MFI MFS MJCS MM MNO MOET MFAICET Ministry of Foreign Affairs, International Cooperation and External Trade MSMEs MTTICNVB Ministry of
 Trade, Tourism, Industry, Commerce and Ni-Vanuatu Business NBV NFIS NFIC National Bank of Vanuatu National Financial Inclusion Strategy National Financial Inclusion Council Micro, Small and Medium Enterprises 6 | P a g e NGO NTDC NZAID OGCIO ORCBDS PIRI P2G P2P PFIP PMO RBV RTC SDGs TRBR TVET SMS URA UNCDF VCCI VFIU VFSC VNPF VNSO VSP VUV VQA Non-Government Organisation National Trade Development Committee New Zealand Aid Programme Office of the Government Chief Information Officer Office of the Registrar of
 Cooperatives and Business Development Services Pacific Island Regional Initiative Person-to-Government Person to Person Pacific Financial Inclusion Programme Prime Minister’s Office Reserve Bank of Vanuatu Rural Training Centres Sustainable Development Goals Telecommunications, Radio communications and Broadcasting Regulator Technical and Vocational Education and Training Short Message Service Utilities Regulatory Authority United Nations Capital Development Fund Vanuatu Chamber of Commerce and Industry Vanuatu Financial Intelligence Unit Vanuatu Financial Services Commission Vanuatu National Provident Fund Vanuatu National Statistics Office Vanuatu Skill Partnership Vanuatu Vatu Vanuatu Qualification Authority 7 | P a g e Acknowledgement The Reserve Bank of Vanuatu (RBV) acknowledges and thanks the valuable contribution of all stakeholders, and development partners for contributing to the national financial inclusion strategy for Vanuatu.
We wish to acknowledge the contribution of the Pacific Financial Inclusion Programme (PFIP) during stakeholder consultations carried out in 2017 and in drafting this document.
The Reserve Bank of Vanuatu also wishes to make mention the Alliance for Financial Inclusion (AFI), Bankable Frontier Associates (BFA), the Government of Vanuatu through the Vanuatu National Statistics Office (VNSO) for their contributions to the Demand Side Survey (DSS) and the Micro, Small and Medium-sized Enterprises (MSME) survey.
Also the Bank wishes to thank our stakeholders for their feedback at the consultation period and consultation workshop, as well as the immense contributions from the members of the Technical Committee on Financial Inclusion at the Reserve Bank of Vanuatu, the Governor and Deputy Governor of the Reserve Bank of Vanuatu for their commitment towards this strategy document.
8 | P a g e Executive Summary Financial Inclusion or Inclusive Financing is an initiative to deliver financial services such as deposits and savings accounts, credit, payment channels and insurance services, affordable and accessible to the disadvantaged, low income earners, the underserved or unserved segments of the society.
Financial Inclusion is now widely accepted as an effective strategy for equitable economic growth, through which low income earners can be economically empowered and can improve their standard of living.

Financial Inclusion has become an important policy and development agenda for many developing countries including Vanuatu.

Vanuatu is amongst the many developing and emerging countries globally that have made measurable commitments under the AFI’s Maya Declaration to achieve financial inclusion.
The Vanuatu National Financial Inclusion Strategy (NFIS) 2018 - 2023 presents the medium-term road map to drive financial inclusion across the country.

This five year strategic plan is linked to Pillar 3 of the Vanuatu Government’s National Sustainable Development Plan 2016-2030.

Pillar 3 seeks to ensure a stable economy through sustainable and equitable growth and has nine main objectives, the latter two being “ECO.
1.8 - Ensure financial sector stability and make financial services affordable and accessible for all through pursuing financial inclusion strategies.

ECO 1.9 Promote financial literacy and consumer empowerment.” In addition, the NFIS is further informed by the work of the Pacific Islands Regional Initiative (PIRI) in the region, together with the recently launched Vanuatu Financial Services Demand Side Survey on Financial Inclusion and the MSME Finance survey.
The NFIS has been developed after a series of consultations with key financial inclusion stakeholders across the private and public sectors and includes a series of structured consultations with civil society, non-governmental organisations and development partners.

These consultations have been jointly facilitated by the Reserve Bank of Vanuatu and the Pacific Financial Inclusion Programme, including consultations prior to, during and post the preparation of the NFIS.

9 | P a g e Figures No.
Title 1a Financial Inclusion Strands Financial Inclusion Strands Table Savings by source and value (VT) Credit Bank account usage Insurance Remittances Financial Inclusion in PIRI member countries Number of commercial banks branches Number of ATMs Gender access to financial services in PIRI member countries Financial Inclusion Strands for MSME Financing 1b MSME: Access to credit for Business Start-ups 13 MSME: Access to Credit for business financing 14 MSME: Use of Credit 15 16 Mode of payments for MSME 17 MSME: Internet Banking 18 MSME: Insurance Gender in Business Diagrammatic framework of the 4 strategic goals Key financial inclusion stakeholders Structure of the National Financial Inclusion Council Indicators – Access, Usage, Quality and Financial Literacy Key Evaluation Indicators Use of credit for business financing 10 | P a g e 1.
Background Financial inclusion is defined as creating an enabling environment whereby all adults, households and micro, small and medium enterprises (MSMEs) in Vanuatu, both have access to and use affordable and appropriate formal financial services to improve their lives.

These financial services are complemented by financial literacy and consumer empowerment & protection.
Being part of the formal financial system, helps individuals to improve their welfare by:  Safeguarding savings, which can help individuals, households and MSMEs manage irregular cash flow, smooth consumption and build working capital;  Conducting day-to-day transactions effectively and efficiently, including making payment for basic needs, sending and receiving money;  Mitigating shocks and managing expenses related to unexpected events such as medical emergencies or natural disasters;  Planning and paying for recurring expenses, such as utilities and school fees; and  Financing small businesses or microenterprises by helping owners invest in assets and grow their businesses.1 The RBV is committed to and has taken a strategic lead in driving financial inclusion in Vanuatu.
The Financial Inclusion journey began with a National Financial Inclusion Workshop held in early 2012.

The workshop gathered together stakeholders from the public and private sector, civil society groups, donor agencies and development partners to take stock, consult and strategize on a way forward for the development of financial inclusion in Vanuatu.
In late 2012, the RBV took a step further and joined other countries to make global measurable commitment to the Maya Declaration at the 4th AFI Global Policy Forum (GPF) in Cape Town, South Africa.

The four main areas of focus were: (1) national financial inclusion strategy; (2) data and measurement; (3) consumer empowerment, protection and market conduct; and (4) accessible and appropriate financial literacy and education.

To date, significant achievements have been made to most of the above targets.
These included: the integration of financial education (FinED) into the school curriculum at primary level (years 1 – 3); the issuance of guidelines to commercial banks for reporting of data on access and usage of financial services; and public awareness and community outreach through a variety of initiatives offered by various institutions including the RBV.

In spite of these achievements, there still remains a lot to be done to ensure more ni-Vanuatu are financially included.
1 CGAP http://www.cgap.org/about/faq/what-financial-inclusion-and-why-it-important 11 | P a g e 2.

Guiding Principles The NFIS has its foundations in the guiding principles for innovative financial inclusion established by the G20 Financial Inclusion Experts Group.

These principles are built on the experiences and lessons learned from policymakers across the world, including leaders from developing countries.

1.
1.

Leadership: Cultivate a broad-based government commitment to financial inclusion to help alleviate poverty.

2.

Diversity: Implement policy approaches that promote competition and market-based incentives for delivery of sustainable and affordable services, as well as a diversity of service providers.

3.

Innovation: Promote technological and institutional innovation as a means to expand financial system access and usage, including by addressing infrastructure weaknesses.

4.
4.

Protection: Encourage a comprehensive approach to consumer protection that recognizes the roles of government, providers and consumers.

5.

Empowerment: Develop financial literacy and financial capability.

6.

Cooperation: Create an institutional environment with clear lines of accountability and co-ordination within government, and encourage partnerships and direct consultation across a range of stakeholders.

7.
7.

Knowledge: Utilize improved data to make evidence-based policy, measure progress, and consider an incremental “test and learn” approach acceptable to both regulators and service providers.

8.

Proportionality: Build a policy and regulatory framework that is proportionate with the risks and benefits involved in such innovative products and services and is based on an understanding of the gaps and barriers in existing regulation.

9.
9.

Framework: Consider the following in the regulatory framework, reflecting international standards, national circumstances and support for a competitive landscape: an appropriate, flexible, risk-based Anti- Money Laundering and Combating the Financing of Terrorism (AML/CFT) regime; conditions for the use of agents as a customer interface; a clear regulatory regime for electronically stored value; and market-based incentives to achieve the long-term goal of broad interoperability and interconnection.
These principles are a reflection of the conditions conducive to spurring innovation for financial inclusion while protecting financial stability and consumers.

They are not a rigid set of requirements but are designed to help guide policymakers in the decision making process.

They are flexible enough so they can be adapted to different country contexts.

12 | P a g e 3.
12 | P a g e 3.

Financial Inclusion in Vanuatu Financial inclusion is a journey that begins with enrolment with a formal financial service provider and develops as the customer uses savings, credit, insurance, and payment services to manage his or her daily financial life.

In Vanuatu, 37% of adults aged 15 years and over have a commercial bank account, while another 10% access financial services from other formal providers such as credit unions, microfinance, insurance, mobile money, or finance companies.
32% of adults are excluded from both formal and informal financial services.

3.1 Financial inclusion strand Figure 1a: Financial Inclusion Strands 37% 10% 21% 32% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Banked Other formal Informal only Excluded Figure 1b: Financial Inclusion Strands Financial inclusion strand Banked The respondent currently has a formal bank account.
Other formal Informal only Excluded Over the past 12 months, the respondent used the services of a credit union, microfinance institution (MFI)2, pension, investments (stocks, bonds and others), insurance or owns a mobile money account.

Over the past 12 months, the respondent has used a savings club or other non-regulated financial instrument, such as taking credit from a shop, moneylender, or hire purchase.
Over the past 12 months, the respondent has not used any of the services mentioned for the other three categories, but may have borrowed from or lent to friends and family, saved money in the house, pawned goods, borrowed from an employer, saved with a money guard, or trusted person, etc.

This category would include respondents who only use money transfer services, as well.
The excluded are more likely to be: • • • • Lower income earners Women Earn income from agriculture Rural 2VANWODS Microfinance, Inc. is the only MFI operating in Vanuatu.

It is a registered NGO.

13 | P a g e 3.2 Savings According to the DSS report, 59% of ni-Vanuatu adults saved money in the past year, with women much more likely to be savers.

Informal instruments are more commonly used for saving than bank accounts, with 58% of adults saving a median of 10,000 Vatu (USD 94) at home.
While just 21% of adults saved in the bank in the past year, they saved double that amount.
Figure 2: Savings by source and value (VT) 58% 10,000 20,000 21% 10,000 10% 10,000 9% 9,000 8% Home Savings in the bank Family Savings clubs Moneyguard Percent with source Amount saved (Median) 25,000 20,000 15,000 10,000 5,000 0 ) u t a v ( d e v a s t n u o m A 80% 60% 40% 20% 0% r e c u o s h t i w t n e c e P r 3.3 Credit Forty six (46%) of adult DSS respondents took some form of loan in the past year, with informal instruments such as shop credit,(32%), moneylenders and family being the most commonly used.
The largest credit amounts come from the bank, but only 6% of adults have taken credit from a bank in the past year.
Figure 3: Credit e c r u o s h t i w t n e c r e P 40% 20% 0% 32% 1,000 7% 2,000 7% 3,000 60,000 6% Shop credit Moneylender Family Percent with source Credit from the bank Amount owed (Median) 4% 3,500 4% 1,500 Employer Savings club 80,000 60,000 40,000 20,000 0 ) u t a v ( d e w o t n u o m A 3.4 Bank account usage The DSS depicts that even among banked adults (37%), almost 40% are not saving or borrowing regularly with banks: 22% of banked adults reported no transactions in the past 12 months and a further 17% of banked adults only use their accounts for deposits or withdrawals.
Women are significantly more likely to use their accounts to save than men.

14 | P a g e Figure 4: Bank account usage 22% 17% 45% 2% 13% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% No transactions Saved in the past 12 months Saved and borrowed in the past 12 months Transactions only (withdrawals or deposits) Borrowed in the past 12 months 3.5 Insurance Almost half of adults in Vanuatu do not know what insurance is.

The DSS finds that only 5% have some form of insurance coverage.
The main reasons stated by respondents for not having insurance cover are that it is too expensive (over 1/3 of respondents), not knowing where or how to get it (over ¼ of respondents) and not knowing what it is or how it works (nearly 1/5th of respondents).

Figure 5: Insurance 5% 48% 47% Have insurance Know what insurance is but don’t have it Don’t know what insurance is 15 | P a g e 3.6 Remittances Almost 50% of adults of the DSS respondents have either sent or received remittances in the past year.
In Vanuatu, the majority of remittances are sent from within the country, with 55% of these sent through Western Union.

Due to the timing of the survey, this result may have been influenced by inward remittance flows related with Cyclone Pam.
Figure 6: Remittances 60% 40% 20% 0% 33% 27% 49% 11% Received remittances Sent remittances Send or receive remittances Send and receive remittances 3.7 Regional Comparison In Vanuatu, the percentage of banked adults (37%) appears to be lower across other Pacific Island Regional Initiative (PIRI) member countries: Samoa (39%), Tonga (41%) and Fiji (60%), however higher than Solomon Islands (26%).
Figure 7: Financial Inclusion in Vanuatu compared to other PIRI-member countries Fiji (2015) Tonga (2016) Samoa (2015) 60% 4% 9% 27% 41% 39% 11% 14% 12% 15% Vanuatu (2016) 37% 10% 21% Solomon Islands (2015) 26% 8% 35% 34% 34% 32% 31% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Banked Other formal Informal only Excluded The data collected by the International Monetary Fund’s Financial Access Survey (FAS) helps to explain the variation between countries.
Vanuatu has financial inclusion levels in the middle of other PIRI-member countries, and it is similarly situated according to supply-side measures like the penetration of commercial bank branches and ATMs.

16 | P a g e As Figure 8 shows, in 2014 Vanuatu had the second highest levels of commercial bank branches per 100,000 adults, behind Samoa, and the third highest number of ATMs per 100,000 adults, behind Fiji and Samoa.
Figure 8: Number of commercial banks branches per 100,000 adults 21 22 22 23 30 25 20 15 10 5 0 2011 2012 2013 2014 Vanuatu Tonga Samoa Fiji Solomon Islands Source: IMF Financial Access Survey, available at http://fas.imf.org/ Figure 9: Number of ATMs per 100,000 adults 34 36 35 35 50 40 30 20 10 0 2011 2012 2013 2014 Vanuatu Tonga Samoa Fiji Solomon Islands Source: IMF Financial Access Survey, available at http://fas.imf.org/ In Vanuatu, the percentage of adult females with bank accounts (32%) appears to be lower than across other Pacific Island Regional Initiative (PIRI) member countries: Fiji (52%) and Samoa (40%) though higher than Solomon Islands (20%).
17 | P a g e Figure 10: Percentage of female who have bank accounts Account at a financial institution (% 15+) Account at a financial institution Male (%15 +) Account at a financial institution Female (% 15+) 37% 39% 26% 41% 38% 32% 60% 68% 32% 52% 40% 20% Vanuatu 0% Fiji 20% 40% 60% 80% Samoa Solomon Islands Source: National Financial Inclusion strategies for Fiji, Samoa and Solomon Islands 3.8 Financial inclusion strand for MSME Financing3 Figure 11: Financial Inclusion Strand for MSME financing 3Due to resource and data limitations encountered during the MSME survey, the financial inclusion strand for MSME finance is a summary of the findings and may not be used as a baseline indicator.
These indicators are subject to improvement in the next MSME survey.
18 | P a g e Financial Inclusion Strand for MSME FinancingMSMEs accessed commercial banks loans for starting their businessCommercial banksOver the past 12 months the MSME have accessed and used loans and overdraft from commercial banks for financing their buiness Other financial Institutions MSME accessed and used loans from Credit Corperation Vanuatu, Vanuatu Agriculture Bank, Vanwoods, Apma Financial Investment Corporation (AFIC) and Other financial Institutions (OFI) for business startupsDuring the past 12 months businesses have accessed and used credit from Credit Corporation Vanuatu, the Vanuatu agriculture bank, Vanwwods, AFIC and OFI for the financing of their businessInformal savings Business used savings ( held at home) for buisness startups Over the last 12 months Buisiness used (savings) retained earnings from buisiness for financing their businessInformal creditBusiness borrowed money lender family and friend for busines startupsMSME borrowed from the informal sector to finance their buisnessExcluded MSME did not access the above categories for business start-up, however may have used other sources such as sale of assets,Buisnesses who have enquired from financial institutions but were rejected.
Over the past 12 months the businesses have not accessed and used any services provided by the said categories OR do not know of the services available or though it was not applicable to their business The excluded are more likely to be: • • • Seasonal workers Agri- businesses Irregular income earners 3.9 MSME: Access to credit for business start-up Seventy seven (77) percent of MSMEs in Vanuatu used informal savings for business start-ups, followed by 10 percent borrowed from commercial banks, 8 percent use other sources not specified in the survey, while 2 percent used informal credit and loan from other financial institutions respectively.
Figure 12: Access to credit for business start-ups 2 8 2 10 77 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Other financial Institutions Informal credit Excluded Commercial banks Informal Savings 3.10 MSME: Access to credit for business financing Sixteen (16) percent of MSMEs applied for loans from commercial banks during the past twelve months.

Forty two (42) percent did not apply for other reasons and 42 percent were excluded.
Similarly, only 2 percent of MSMEs applied for loans from other financial institutions, 32 percent did not apply for other reasons and 66 percent were excluded.
Figure 13: Access to credit for business financing Excluded Did not apply but aware of the product 42 42 66 32 Applied for loans 16 2 Commercial bank Other financial institutions 0 20 40 60 80 100 % 19 | P a g e 3.11 MSME: Application for and Use of Credit Of those MSMEs which applied for loans, only 15 percent received part or total loans requested from commercial banks, 5 percent of businesses which had applied for credit were rejected while 81 percent were excluded.
With regards to other financial institutions, only 2 percent of MSMEs which applied for loans from other financial institutions received part or everything, 1 percent were rejected and 97 percent were excluded.
Fifty three (53) percent of the MSMEs used the loans for working capital, 30 percent for purchasing land, buildings or equipment and vehicle, 6 percent, for buying another business, 7 percent for restructuring and process development, less than 1 percent on research & development and promotion, respectively and 2 percent spend on others.

Figure 14: MSME Credit Application Informal Inst.
2 0 0 1 Other financial institution Commercial bank 5 15 99 97 81 0 20 40 60 80 100 % Received part or total loan requested Applied but did not receive loan Excluded 3.12 MSME: Usage of credit for Business financing In terms of the financing structure of the business, 72 percent of businesses in Vanuatu used internal funds for financing their business, 21 percent used commercial bank loans and overdrafts, 3 percent used trade credit and 1 percent borrowed from other financial institutions.
20 | P a g e Figure 15: Use of credit for business financing 3.13 MSME: Payment Instruments Eighty-seven (87) percent of the total businesses surveyed used cash for transactions, 10 percent used cheques, 2 percent used other modes of payment4, and only 0.2 percent used electronic mode of payments such as ATM card, Visa card and MasterCard.
Figure 16: Mode of Payments of MSME 87 10 2 0 10 20 30 40 50 60 70 80 90 100 % Electonic payments Cash Cheque Others 3.14 MSME: Internet banking According to the MSME survey, 8 percent of the MSME in Vanuatu used internet banking for business transaction while 92 percent did not use internet banking.
4 Other modes of payment for this purpose includes, bank telegraphic transfers and direct debits from bank accounts 21 | P a g e Figure 17 Proportion of MSMEs using Internet Banking 92 0 20 40 60 80 Not Use of Internet Banking Use of Internet Banking 8 % 100 3.15 MSME: Insurance Twenty three (23) percent of MSMEs in Vanuatu had insurance cover, while 77 percent did not.
This slow uptake in insurance cover may be attributed to the lack of awareness and understanding by potential insurance buyers (businesses), and its affordability.

Figure 18: Percentage share of business with insurance 3.16 Gender in Business In Vanuatu, 60 percent of MSMEs are owned by male followed by 20 percent female, 12 percent are within the youth category and 8 percent, other category*.

Figure 19: Percentage share of male, female and youth in business 22 | P a g e 4.
Vision, Mission and Objectives 4.1 Vision Create an enabling environment for enriching the livelihoods of the people and MSMEs in Vanuatu through inclusive financial services and consumer empowerment and protection.

4.2 Mission By 2023,  Ensure an additional 54,000 (130,000) adults will be active users of formal or semi-formal financial services, of which 50% will be women.
 Ensure 40% of the financially included will be active users.5  Ensure a suite of MSME business financing products are available, which are also tailored to the needs of businesses led by women and youth.

4.3 Objectives 4.3.1 To facilitate an enabling regulatory and supervisory environment for providers and users of financial services.

4.3.2 To enable the people and MSMEs in Vanuatu to have access to a range of appropriate and sustainable financial services at an affordable cost.
4.3.3 To foster financial inclusion deepening and resilience via increased and regular usage of financial services.

4.3.4 To strengthen the financial competencies of the people of Vanuatu to enable better informed financial decision making together with the optimal use of financial services to better their livelihoods.

4.3.5 To facilitate consumer protection of consumers of financial services and for MSME finance.
4.3.6 To use a multi-stakeholder and multi-sector approach to enable a concerted and comprehensive national approach to addressing financial exclusion.

4.3.7 To promote the development in the MSME sector to improve financial users’ income.

5 Active users conduct at least one transaction within a 90 day period.

23 | P a g e 5.
23 | P a g e 5.

Financial Inclusion Strategy 2018 – 2023 The Strategy sets out a clear direction for financial inclusion and is driven by the overarching goals of improving both, access to and usage of appropriate financial services by the Ni-Vanuatu population and micro small and medium enterprises in Vanuatu.
These financial services could include formal and informal financial services for the adult population and formal and informal business financing for MSMEs, in addition to consumer empowerment and protection via financial literacy programmes, consumer protection mechanisms and equitable market conduct standards.
Based on recent findings of the DSS report, an estimated 32% of adults are the underserved, comprising individuals in the informal sector together with excluded as per the financial inclusion strands in Figure 1a above.

Also the MSME survey indicated that around 42% and 66% of MSMEs are excluded from accessing credit from commercial banks and other financial institution, respectively.
Figure 20: Diagrammatic framework of the 4 strategic goals Enabling policy environment Inclusive products, services and channels 2018 - 2023 MSME Financing Financial literacy & Consumer empowerment 5.1 Strategic Goal 1 – Create an enabling policy environment and financial infrastructure 5.1.1 Establish a forum through which legally appointed regulators and supervisors can interact and share information regularly on financial inclusion-related policy, regulation, supervision and financial service provider or industry data.
5.1.2 Develop and strengthen financial infrastructure, policy and regulatory environment and ecosystems that balance opportunities and innovations in financial markets leading to improved access, usage and quality of financial services.

5.1.3 Ensure consistency in Know Your Customer requirements across all financial service providers and ensure that they facilitate the changing market whilst meeting regulatory and other needs for KYC.
5.1.4 Bridge the data gap to enable rigorous data collection for evidence-based policy making and effective product and services development.

5.1.5 Create a coordinated effort to build a financial inclusion eco-system and to provide oversight of the implementation of the NFIS.
24 | P a g e 5.2 Strategic Goal 2 – Promote and foster inclusive products, services and channels 5.2.1 Improved access to formal financial services for all, particularly the rural population, women, individuals engaged in agriculture and lower-income households.

5.2.2 Encourage a suite of financial products and services, including digital financial services and inclusive 5.2.3 insurance that suit the needs of the excluded population.
Implement interoperability of electronic payment platforms between formal financial service providers such as banks and further between financial service providers and mobile network operators.

5.2.4 Promote electronic payment channels in Government transactions, including state-owned enterprises.

5.2.5 Encourage digital payment channels among medium to large private sector employers and associations for business-to-business transactions.
5.2.6 Explore green finance vis-à-vis financial inclusion to extend the outreach and usage of financial services.

5.2.7 Test and roll-out institutional innovations including technology, agent networks and shared platforms that can improve both outreach and access whilst reducing costs and addressing agent liquidity and other agent-related administrative issues.

5.2.8 Test digital solutions for informal financial service providers, including electronic book-keeping and financial literacy applications.
5.2.9 Enhance the range of financial services by strengthening existing financial service providers across the formal, other formal and informal sectors, inclusive of aligning human resource and capacity training with international best practice.

5.3 Strategic Goal 3 - Micro, Small and Medium Enterprise Financing 5.3.1 Introduce policies and a regulatory environment to support access to finance for MSMEs, with a specific target of 30% of women.
5.3.2 Coordinate and harmonize Government’s work through a variety of line Ministries to mainstream financial inclusion products and Programmes targeted at MSME, rural entrepreneurs and women-owned institutions.

5.3.3 Ensure there is effective collaboration between Government and the private sector in regard to improving access and usage of financial services for MSMEs.
5.3.4 Promote the development of an accessible suite of quality, affordable and easily accessible financial services, including insurance for MSMEs and value chains in the agriculture, fisheries and tourism sectors.

Simplify loan application processes for small rural entrepreneurs.

5.3.5 5.3.6 Encourage widely available financial literacy Programmes targeted at building entrepreneurial and financial management skills, including women entrepreneurs.
5.3.7 Promote consumer protection and empowerment in MSME Finance.

25 | P a g e 5.4 Strategic Goal 4 - Financial Literacy and Consumer Empowerment 5.4.1 5.4.2 Strengthen financial education in educational institutions at the national and sub-national level, the latter being within the TVET sector or other tertiary institutions.

Integrate financial literacy and product awareness by financial service providers into financial services offerings.
5.4.3 Raise awareness of the general public vis-à-vis the Secured Transaction Act and other Financial Services- related consumer impact legislation.

5.4.4 Ensure consistency in financial services product disclosure and transparency on fees and charges across all financial services providers.

5.4.5 Ensure consistency in or wide awareness of financial services redress and recourse mechanisms across financial services industries.

5.4.6 Develop a financial literacy strategy.


26 | P a g e 5.5 Strategic Goals and Action Plan Goal 1: Create an enabling policy environment and financial infrastructure Key Result Areas 1.

Establish a forum through which legally appointed regulators and supervisors can interact and share information regularly on financial inclusion-related policy, regulation, supervision and financial service provider or industry data.
Action Plan Financial Inclusion Taskforce to create a separate working group of regulators and supervisors.

Map full spectrum of financial service related legislation and policies.

Lead Institution(s) FIT, RBV, TRR, VFSC, OGCIO, ORCBDS, VFIU, URA Timeframe Q3, 2018 and ongoing Q1, 2019 Target/Indicator Meetings once every two months, attendance/representation.

Map of financial service regulators and supervisors financial and related legislation service-related and policies created.

2.
2.

Develop and policy strengthen and financial infrastructure, regulatory environment and ecosystems that balances opportunities and innovations in financial markets leading to improved access, usage and quality of financial services.

Data of the financial services industry extended beyond the purview of the RBV.
Consolidated services industry data financial Collaborate with development partners on diagnostic exercises and assessments of financial infrastructure, including reviewing the design of, prioritization and sequencing of key interventions and policies.

reforms, financial sector Regulatory Assessment Study report.

Impact regulation and Review existing and proposed supervision to establish areas of conflict with financial inclusion and financial stability needs.
Identify financial services and channels for which “No Objection” letters are possible.

Encourage innovation through amendment of financial system rules and regulations to address financial inclusion target groups.

No.

of financial services for which regulatory the sandbox is being applied.

Put System Infrastructure.

in place Payment RBV, FIT, OGCIO, VFIU, TRR,URA VFSC, ORCBDS, Q1, 2020 Q2, 2019 and ongoing Q1, 2019 Q2, 2019 Q4, 2020 27 | P a g e Key Result Areas 3.
Ensure consistency in Know Your Customer requirements across all financial service providers and ensure that they facilitate the changing market whilst meeting regulatory and other needs for KYC.

Action Plan Develop reduced KYC requirements that can be used across all financial service industries and the MSME sector and undertake awareness on the same.

Target/Indicator Reduced KYC requirements industry-wide with acceptability.

Lead Institution(s) RBV, VFSC, OGCIO, VFIU, PMO, MFEM Timeframe Q3, 2019 4.
Bridge the data gap to enable rigorous data collection for evidence-based policy making and services development.

effective product and from service financial Build database leveraging off existing regulatory data collection providers, requirements to inform commitment compliance and obligations under the AFI Data Project, amongst others.

Share pertinent information with other regulators and supervisors in the market.
Engage with FSPs for regular timely reporting FIT, RBV, VNSO Q4, 2019 Database of key financial indicators.

Data inclusion reported semi-annually and/or quarterly.

MOUs between RBV and other supervisors/ regulators or non-regulated institutions for the purpose of financial inclusion data collection.

5.

Create a coordinated effort to build a financial to provide oversight of the implementation of the NFIS.

inclusion eco-system and Undertake 1 additional DSS activity to inform progress.

DSS Report.
DSS Report.

Proxy demand side data tracked semi- annually No.

of quarterly reports of progress NFIS targets.

2 Legislations enacted Review of FIT mandate and prepare TORs for Working Groups, which includes quarterly reporting on NFIS targets.
Clear regulatory backlog of draft legislations: Payment System, Competition and Consumer Protection against FIT, RBV, VNSO Q3, 2023 FIT, RBV 2018 Q4, and ongoing RBV, MFEM, VFSC, OGCIO, MTTICNVB Q1, 2020 28 | P a g e Goal 2: Promote and foster inclusive products, services and channels Key Result Areas 1.

Improved access to formal financial services for all, particularly the rural population, individuals engaged in agriculture, lower- income households, women and youth.

3.

2.
3.

2.

Encourage a suite of financial services, including digital financial services that suit the needs of the excluded population.

interoperability of electronic Implement payment formal between platforms financial service providers such as banks and further between financial service providers and mobile network operators.

4.

Promote electronic payment channels in Government transactions, including state- owned enterprises.
Action Plan Develop synergies and build public/private partnership models to progress financial inclusion.

Develop and maintain a publicly available online geo- spatial map of financial access points, updated quarterly.

Research and pilot new services and approaches, including digital financial services.

Target/Indicator Public/private partnerships Financial inclusion map posted online and updated quarterly.
DSS 32% are excluded financially Implement Payment Systems Act Introduce ATM interoperability for banks Introduce EFTPOS interoperability for banks Undertake mobile money pilot Introduce MNO interoperability for users Map government payment and receipt flows.

Undertake pilot to digitize G2P/P2G Payments within a Government ministry/department with potential to rollout to wider Government.

Act finalized and enacted Interoperability.

No.

of transactions Interoperability.

No.

of transactions No.


of transactions 60% than Interoperability.

No.
of transactions More of Government payments and through flow receipts electronic channels 2 pilots using electronic payment in Government transactions channels Lead Institution(s) FIT, RBV, donors, ORCBDS, MNOs FIT, RBV Timeframe Ongoing Ongoing Commercial FIT, RBV, FSPs (mainly Commercial banks) , MNOs, RBV, MFEM RBV, Banks , MNOs RBV, Banks, MNOs (mainly FSPs Commercial Banks) MNOs, RBV, MNO Commercial FIT, RBV, MFEM, FSPs, Commercial Banks, MNOs Ongoing Q2, 2019 Q3, 2019 Q2, 2020 Q2, 2020 Q4, 2022 Q4, 2019 FIT, MFEM, RBV, MNOs, FSPs, Commercial Banks Q4, 2019 29 | P a g e Key Result Areas 5.
Encourage digital payment channels among medium to large private sector employers and associations for business-to-business transactions.

6.

Explore green finance vis-à-vis financial inclusion to extend the outreach and usage of financial services.

7.

Test and roll-out institutional innovations including technology, agent networks and shared platforms that can improve both outreach and access whilst reducing costs and addressing agent liquidity and other agent-related administrative issues.

8.
8.

Test digital solutions for informal financial service providers, including electronic book- keeping and financial literacy applications.

9.

Enhance the range of financial services by strengthening existing financial service providers across the formal, other formal and informal sectors, inclusive of aligning human resource and capacity training with international best practice.
Action Plan Working Group to initiate discussions with industry bodies or large private sector employers Conduct B2B study and support selected field trials Promote digital/electronic payment options via Vanuatu Chamber of Commerce & Industry Undertake 1 green finance pilot, preferably impacting women or a segment of the low-income and rural population Standards to be established for measurement of and operating rules for agent liquidity.

Target/Indicator No.


of companies making payments for taxes, goods & services and wages & salary electronically.

Lead Institution(s) FIT, RBV, VCCI, MNOs, FSPs (mainly Commercial banks) Timeframe Q2, 2019 Q2, 2020 Q2, 2019 No.

of customers, new financial inclusion service.

FIT, RBV, FSPs, MNOs, ORCBDS Q3, 2022 Standards endorsed FSPs RBV, FIT, (Commercial Banks), MNOs Q3, 2021 Introduce digital book-keeping via a pilot for an informal service provider with the opportunity to scale up.
Source and promote app using a smart phone.

Introduce technology for the training and financial literacy of customers.

Identify capacity and capability gaps and options for training of FSPs.

Coordinate action plan to optimally address these gaps.

No.

of participants and no.

of trained.

RBV, VFSC, OGCIO, PFIP, ORCBDS, MNOs Q1, 2023 No.

of new services, No.

of FSPs trained RBV, FIT, OGCIO, ORCBDS VFSC, Q4,2023 30 | P a g e Goal 3: Micro, small and medium enterprise development Key Result Areas 1.
Introduce policies and a regulatory environment to support access to finance for MSMEs, with a specific target of 30% of women.
Action Plan Liaise with MTTCINVB on MSME Act with relevant policy regulations targeting MSMEs, including; - National SME/MSME Definition - National SME/MSME Coordinating - Body/ structural framework Establishing an avenue for MSME support and development and asset and risk management Target/Indicator Finalize and legislation and policies adopt relevant Lead Institution(s) FIT, RBV, NTDC, VFSC, VCCI, MTTCINVB Timeframe Q4, 2019 RBV to work with Government to develop and regularly update MSME registry and standardized registry in every province.
Registry developed (MSMEF MTTICNVB, FIT RBV, WG) DARD, DLA Q4, 2019 2.

Coordinate and harmonize Government’s work through a variety of line Ministries to mainstream financial inclusion products and Programmes targeted at MSME, rural entrepreneurs, women and youth owned institutions.
Government to establish MOUs between line Ministries to enable a Holistic Approach in addressing MSME issues The number of MOUs signed FIT, RBV, MALFFB, MTTICNVB, MoET, TRR, VFSC Q2, 2021 A stock-take of Government MSME initiatives, target population segments and Government entities involved to be undertaken Stock-take completed RBV, FIT, MTTCINVB VCCI, Q1, 2019 31 | P a g e Key Result Areas 3.
Ensure there is effective collaboration between Government and the private sector in regard to improving access and usage of financial services for MSMEs.
Action Plan Consider the implementation of a credit bureau for MSMEs Public/private established sector MSME Working Group Re-establish and expand rural agricultural expansion services to increase farmer participation through the following avenues: Target/Indicator 1 policy paper Meetings attendance/ representation Number services available of expansion - - - financial Collaborate with service providers for agriculture extension services to advise, mentor and support farmers’ access to credit Identify avenues to act as credit guarantee or risk sharing to minimize lending risk Identify financial infrastructures to specifically target the MSME Sector potential other Research and pilot new products and services, including digital financial services and mobile banking, insurance and value chains Number products, of Number of customers with gender disaggregated data Review current MSME targeted processes and information and standardize loan application Simplified loan application Standardized processes/ and loan the assessment industry process across 4.
Promote the development of an accessible suite of quality, affordable and easily accessible including insurance for MSMEs and value chains in the agriculture, fisheries and tourism sectors.

5.

Simplify loan application processes for small services, financial rural entrepreneurs.
Lead Institution(s) RBV, VFSC FIT, RBV MTTICNVB, held, Timeframe Q1, 2019 Q3, 2018 and ongoing RBV, MALFFB, MFEM, NBV RBV, FSPs, FIT, Insurance Companies, MNOs, MTTCINVB Q1, 2019 Q4, 2022 Q4, 2022 Ongoing FIT, RBV, Commercial Banks Q4, 2019 32 | P a g e Key Result Areas 6.

Encourage widely available financial literacy Programmes building targeted entrepreneurial and financial management skills, youth entrepreneurs.
including women and at current vocational Action Plan Review training providers Programmes to ensure financial literacy is covered to strengthen financial management, women and youth entrepreneurs after completion of training.
Undertake stock-take of Financial Literacy Programmes targeted at MSMEs Develop key general learning areas for financial literacy, entrepreneurship and enterprise training for MSMEs Develop and maintain database of trainings held for MSMEs and Introduce Financial Literacy and entrepreneurship education within targeted curriculum at targeted educational institutions financial consumer protection Develop legislation and wider regulation on use and delivery of financial services to strengthen client protection for MSMEs.
Public Awareness drive specific 7.

Promote consumer empowerment in MSME Finance.

protection Target/Indicator Harmonize training Programmes on financial literacy for all vocational training providers.

Number of financial literacy Programmes offered Matrix of key learning outcomes for the 3 training areas Number of trainings held, with gender disaggregated data Curriculum Number impacted.

Act passed developed.
students of of Number awareness number of trained public activities/ Lead Institution(s) FIT, RBV, MTTCINVB VQA, Timeframe On going FIT, RBV, Financial Training Literacy Providers, MTTCINVB FIT, RBV, MTTCINVB, VCCI Q1, 2019 Q3, 2019 FIT, RBV, MTTCINVB, Financial Literacy Training Providers FIT, RBV, MOET, VSP Ongoing Q4, 2022 FIT, RBV, VFSC, OGCIO, MTTICNVB Q1, 2020 FIT, RBV, VFSC, OGCIO, FSPs, MTTCINVB Q3, 2020 33 | P a g e Goal 4 - Financial literacy and consumer empowerment Key Result Areas 1.
Strengthen financial education in educational institutions at the national and sub-national level, the latter being within tertiary the TVET institutions.

sector or other 2.

Integrate financial literacy and product awareness by financial service providers into financial services offerings.

3.

Raise awareness of the general public vis-à- vis the Secured Transaction Act ( Personal Properties Securities Act) and other Financial Services-related consumer impact legislation.

4.
4.

Ensure consistency in financial services product disclosure and transparency on, terms and conditions, fees and charges across all financial services providers.

5.

Ensure consistency in or wide awareness of financial services redress and recourse mechanisms across services industries.

financial Action Plan Develop action plan for Financial Education in schools, which includes development and piloting of student impact assessment Identify and commence pilot for sub-national education provider.
Map existing financial literacy activities done and by who Target/Indicator Student Impact Assessment Tools developed Lead Institution(s) FIT, MoET, RBV Timeframe Q4, 2019 No.

of students and courses of study No.


of FinLit delivered/annum trainings RBV, FIT, MoET, RTCs/VSP FIT, RBV, FSPs, FinLit providers Q4, 2021 Q1, 2019 Develop minimum financial literacy training areas of learning, in English, Bislama and French, which can be used to ensure minimum standards of coverage to enhance financial competencies of adults across the country, especially those in rural areas.
Public awareness drive Compendium of minimum literacy training financial work areas and sample training materials.

No.

of public awareness activities/ No.

of trained FIT, RBV, FSPs, NGOs, providers, FinLit Government Q4, 2019 RBV, FIT, OGCIO, Commercial Banks VFSC, FSPs, Q4, 2020 Develop and guidelines and client protection guidelines.
implement financial services product Develop supervisory policy on disclosure of fees and charges Draft Competition and Consumer Protection legislation and wider regulation on use and delivery of financial services to strengthen client protection.
client Financial services product protection and guidelines Supervisory policy Act passed RBV, VFSC, OGCIO, ORCBDS (MTTICNVB) Q2, 2020 RBV, FIT Q2, 2020 RBV, FIT, OGCIO, (MTTICNVB) VFSC, ORCBDS Q1, 2020 34 | P a g e The aforementioned goals, their related key result areas, action plans, targets, responsibilities and time frames will be further fleshed out through annual action plans developed by the various working groups established under FIT.
It is envisaged that by December 2020, action plans for all commitments under the Maya Declaration together with the 2020 Money Pacific Goals would be largely completed.

6.

Stakeholders A multi-stakeholder, multi-sector approach to financial inclusion is involved to bring about positive and quantifiable change.
The placement of financial inclusion within the Vanuatu Strategic Development Plan provides stakeholders across a wide range of sectors including private, public, civil society and non- governmental organisations to align their financial inclusion-related efforts and objectives.

Key stakeholders and their roles are listed in the table below.
Figure 21: Key Financial inclusion stakeholders Categories Regulatory Authority NFIC FIT Government Ministries/ Departments Financial Service Providers Institutions RBV,VFIU, TRR, URA, VFSC, ORCBDS, MFEM, including OGCIO & VNSO NFIC Members FIT Group members and Working MFEM, MOET, MoFAICET, MTTICNVB,MALFFB, MoJCS, PMO, MOIA Commercial banks, MFIs, Credit Unions, Cooperatives, Insurance companies, Finance Company, Capital market intermediaries, financial literacy providers.
Roles/Responsibilities  Ensure enabling and supervisory framework in place for financial inclusion  Coordinate and monitor financial inclusion initiatives  Provide advice to government and providers on financial inclusion initiatives and developments  Ensure compliance with financial inclusion policies  Provide oversight and direction on overall NFIS  Drive, monitor, coordinate NFIS implementation through Working Groups  Drive and implement financial inclusion initiatives  Allocate budgetary funds for financial inclusion and its promotion  Implement financial inclusion initiatives  Innovate, develop, test and review new financial services and financial service access points/channels  Supply relevant financial inclusion data to regulatory authority on a regular basis 35 | P a g e Roles/Responsibilities  Collaborate on interoperability of financial services and linked digital payment channels  Ensure compliance with financial consumer protection matters  Escalate and report financial service complaints to relevant authority  Provide and facilitate capacity building and technical support Categories Advocacy Institutions Development partners Institutions Bankers Association of (BAV), Vanuatu Youth National Council, Insurance Companies Association, VYEC Donor agencies, international entities and NGOs e.g.
AFI, PFIP, MFAT, PIRI, DFAT, IFC, Regional Central Banks etc.

ADB, Clients/Customers Clients and other users  Provide feedback of financial services 36 | P a g e 7.

Coordination, Monitoring and Evaluation 7.1 Coordination National Financial Inclusion Council (NFIC) Purpose: The NFIC will provide a high-level forum for steering and coordination of the overall implementation of the national financial inclusion strategy.
Composition: The NFIC is chaired by the Prime Minister and consists of key ministers from four different ministries, namely; MFEM, MTTCINVB, MALFFB and MoET.

The Governor of RBV is also a member of NFIC.

Financial Inclusion Taskforce (FIT) Purpose: The Financial Inclusion Taskforce is the coordinating committee for the overall National Financial Inclusion Strategy 2018 – 2023.
Composition: The membership of the Taskforce and Working Group is aimed at ensuring representatives of key stakeholder groups and every effort will be made to ensure equal representation.

Working Groups (WG) Purpose: The four working groups are structured around the four strategic goals and will provide thematic expertise to the Taskforce.

The four working groups are tasked with specific areas of focus as noted below: 1.
Regulatory Working Group - Create an enabling regulatory environment; - - Discuss and coordinate regulatory initiatives relevant to financial inclusion which span the domain Strengthen the existing financial infrastructure; and of more than one regulator (e.g Digital Financial Services).

2.
2.

- Inclusive Product & Services Working Group Ensure the provision of sustainable, relevant, affordable and accessible financial products and services including insurance products; - Create a digital financial services ecosystem; and - Increase and strengthen public private sector partnership.

3.
3.

MSME Working Group - Facilitate and offer relevant MSME financing products that are sustainable, affordable and responsive to the needs of MSMEs including those led by marginalised groups; and - Create a balance between regulations, enhancing access to MSME financing and empowerment and protection of MSMEs.

4.
4.

Financial Literacy and Consumer Empowerment Working Group - Improving financial competencies through financial education in the school curriculum; 37 | P a g e - Building adult financial competency through better coordination and increase public private sector support; and Enhance financial education awareness; and Ensure effective protection and empowerment of consumers.
- - The RBV will provide the leadership and secretariat support to the Taskforce as well as Secretariat to each of the four Working Groups.

Data collection and Dissemination RBV will coordinate and monitor data collection and dissemination.
Specific areas of focus are: - Monitor the outreach and coverage of existing financial services; and - Regularly monitor impact of financial inclusion efforts through coordination and comprehensive data collection and sharing The monitoring and coordinating committee is structured as per that below.
Figure 22: Structure of the National Financial Inclusion Council National Financial Inclusion Council (NFIC) Financial Inclusion Taskforce (FIT) Regulatory Working Group Inclusive Products & Services Working Group MSME Finance Working Group Financial Literacy & Consumer Empowerment Working Group 38 | P a g e 7.2 Monitoring and Evaluation Framework Each working group established under the FIT will develop medium and shorter (annual) implementation plans for strategic goals and objectives falling with their purview.
Once endorsed by FIT, a half-yearly update on the progress against these strategic goals and objectives, will be escalated to the FIT by each Working Group on a bi-annual or quarterly basis, via structured updates.

The evaluation framework will be largely based on a mix of the AFI Core Set of Indicators, Quality Indicators, and PIRI Core Plus indicators to measure the state of financial inclusion in Vanuatu.
The core indicators relating to Access, Usage, Quality and Financial Literacy form the foundation for measuring national financial inclusion efforts.

Figure 23: Indicators – Access, Usage, Quality and Financial Literacy Access Indicators - Accounts and Channels •New accounts opened including for specific interest groups eg.

women •Measured via availability of a financial access point Usage Indicators - Accounts and Channels •Measured through active financial accounts ie.
accounts which have had at least one transaction in the most recent 90 days •Measured through use of specific channels, which had at least one transaction in the most recent 90 days Quality Indicators •Captured through barriers to accessing and using financial services and products Financial Literacy •Types of financial literacy Programs and number of individuals trained, with breakout for specific interest groups eg.
women 39 | P a g e Figure 24: Key Evaluation Indicators Annex 1: Key Evaluation Indicators 1.

Access Channels by Urban and Rural 2.

Access Channels by Gender 3.

Usage Accounts and Channels 40 | P a g e Annex 2: NFIC, FIT and Working Group Representatives 10.
2.1 NFIC Members Prime Minister of Vanuatu (Chairman) Minister of Tourism, Trade, Commerce, Industry and Ni-Vanuatu Businesses Minister of Finance and Economic Management Minister of Education and Training Minister of Agriculture, Livestock, Forestry, Fisheries and Bio-security Governor, Reserve Bank of Vanuatu 2.2 FIT Members Governor, Reserve Bank of Vanuatu (Chairman) Deputy Governor, Reserve Bank of Vanuatu Advisor, Reserve Bank of Vanuatu Director General, Prime Minister’s Office Director General, Ministry of Finance and Economic Management Director General, Ministry of Agriculture, Livestock, Forestry, Fisheries and Bio-security Director General, Ministry of Internal Affairs Deputy Program Manager, PFIP Chairman RWG Chairman IPSWG Chairman FLCEWG Chairman MSMEFWG 2.3 Regulatory Working Group Vanuatu Financial Intelligence Unit Vanuatu Financial Services Commission Telecommunications Radio-communications and Broadcasting Regulator Office of the Government Chief Information Office Utilities Regulatory Authority Minister of Tourism, Trade, Commerce, Industry and Ni-Vanuatu Businesses Department of Customs and Inland Revenue Department of Rates and Taxes Department of Finance & Treasury Vanuatu National Statistics Office Department of Strategic Policy Planning and Aid Coordination Reserve Bank of Vanuatu 2.4 Inclusive Products and Services Working Group Vanuatu National Provident Fund VNPF Subsidiary- Members Financial Service Limited Telecom Vanuatu Limited Digicel (Vanuatu) Limited Vancare Insurance Capital
 Insurance 41 | P a g e National Bank of Vanuatu ANZ Bank Bank South Pacific Bred Bank (Vanuatu) Ltd Vanuatu Post Pacific Financial Inclusion Programme Credit Corporations Vanuatu Limited Vanwods MFI South Pacific Business Development (SPBD) Non-Governmental Organization (NGO) Department of Finance and Treasury Reserve Bank of Vanuatu 2.5 MSME Finance Working Group Department of Cooperatives and Business Development Services - MTTCINVB Department of Industry Trade Division Unit – MTTCINVB Department of Tourism Vanwods MFI Ministry of Justice and Community Services Ministry of Youth and Sports Development Vanuatu Chamber of Commerce and Industry South Pacific Business Development Insurance companies Department of Local Authority Department of Agriculture and Rural Development Vanuatu Young Entrepreneur Council Reserve Bank of Vanuatu 2.6 Financial Literacy and Consumer Empowerment Working Group Department of Education and Training – MoET Curriculum Development Unit – MoET Commercial Banks Vanuatu National Provident Fund Vanuatu Qualifications Authority Vanuatu National Youth Council Department of Cooperatives and Business Development Services - MTTCINVB Department of Industry - MTTCIVB Trade Division Unit – MTTCINVB Non-Governmental Organisation (NGO) Vanuatu Vocational Training Centers (APTC, VIT, TVET, VRTC etc.)
Reserve Bank of Vanuatu 42 | P a g e