Barry Whiteside: Microfinance in the Pacific - increasing access,
enhancing impact
Keynote address by Mr Barry Whiteside, Governor of the Reserve Bank of Fiji, at the
4th Pacific Microfinance Week, Nadi, 22 October 2013.
* * *
Mr Benny Popoitai - Chairman, Microfinance Pasifika Network and Deputy Governor, Bank
Papua New Guinea.
Mr Clay O'Brien - Senior Sector Specialists, Financial Inclusion, AusAID
Fellow Governors and Deputy Governors.
Mr Robin Yarrow - Chairman, Fiji National Financial Inclusion Taskforce and Members of the
Taskforce
Representatives of our Pacific Microfinance Week sponsors - The Pacific Financial Inclusion
Program; International Finance Corporation and Asian Development Bank.
Distinguished Guests and fellow Participants.
Bula Vinaka and a very good morning to you all!
Introductory remarks
Let me say how delighted I am to deliver the keynote address this morning. On behalf of the
Reserve Bank and our National Financial Inclusion Taskforce, I wish to extend a special
welcome to our Pasifika family and to all our visitors who have travelled from other parts of
the world to join us here on Denarau today.
This year marks the fourth Pacific Microfinance Week and I wish to sincerely congratulate the
organiser, The Foundation for Development Cooperation and convenor, Microfinance
Pasifika Network, as well as all the sponsors, for their foresight and commitment in
advocating and promoting financial inclusion in the region.
"Microfinance in the Pacific - increasing access, enhancing impact"
Our theme, is just further
acclamation of the tremendous drive we have seen in our region towards the inclusion of our
many underserved and unbanked citizens. The fact that we Pacific Island states have our
own Working Group in the global 87 member countries Alliance for Financial Inclusion (in fact
we are the only region to do so) and that at least six of our central bank Governors have
attended the last two annual meetings, speaks volumes of our combined and individual
commitment towards changing the lives of our poorest. I am extremely proud to report that
the Pacific is seen to be a leader on the world stage in a number of things we have been
working on towards financial inclusion.
Financial inclusion - a global phenomenon
Ladies and Gentlemen, financial inclusion is now the buzz word on the agenda of many
global fora. In the September 2009 Pittsburgh Summit, the G20 group of countries had
financial inclusion as an important agenda item. In the subsequent Mexico Summit of June
2012, the G20 formed a Group Peer Learning Program on Financial Inclusion. The United
Nations now has Her Majesty Queen Maxima of the Netherlands as their Special Advocate
for Inclusive Finance for Development and she is also Honorary Patron for the G20 Global
Partnerships for Financial Inclusion. The Alliance for Financial Inclusion held its latest annual
Global Policy Forum in Malaysia in September. Major regional and donor organisations such
as the OECD, CGAP, ADB, AUSAID and GIZ have been organising workshops and
discussions on financial inclusion and there have been inter-regional country meetings such
as those in Africa and in Asia.
At the highest global levels, there is the clear recognition that deliberate financial inclusion
measures and initiatives are essential if we are to reach the 2.5 billion people who do not
have access to any form of financial services and products and who remain in poverty.
Regional coverage
In our own Pacific region, we have come to also recognise the importance of embracing
financial inclusion.
In 2005, the United Nations Development Programme estimated that around 6.5 million
Pacific Islanders and 80 percent of low income people1 did not have access to formal
financial services, making it one of the most neglected regions in the world in terms of
banking services.
I am glad that the Microfinance Pasifika Network took on the advocacy role in the Pacific. In
its vision statement, it says that "...the Network shall be committed to improving quality of life
through the provision of inclusive and sustainable micro financial services, such as savings,
credit, remittances and payment services and insurance, to the economically
disadvantaged..."
However, I am also glad to say that our own central banks and authorities together with other
committed stakeholders, have also taken on the baton
Theme of forum - importance of access and impact
Ladies and Gentlemen, our theme, "Microfinance in the Pacific - increasing access,
enhancing impact", brings a number of questions to mind. How do we reach the unbanked or
those that do not have access to microfinance or any form of financial service and how do we
make a difference to their lives?
Technological innovation
Such questions require the capacity to think outside the box. The problems and the
difficulties are such that one cannot approach and derive a solvable position in many cases
unless one takes a non traditional and non conventional approach to problem solving. This
calls for innovative thinking.
Our problems in the Pacific are fairly similar. We are small island countries that are dispersed
over a wide area of sea. Our economic growth rates are generally low, we do not have many
resources nor do we have the large population mass (Papua New Guinea would be an
exception of course). All our problems require us, as Pacific Islanders, to be innovative
thinkers and to think beyond the traditional and conventional norms of doing things in order
to succeed.
Embracing technological innovation is important for this advancement. In Fiji we have
embraced the importance of adopting technological innovation to help us deliver financial
services to the unbanked. We have noted an increase around the country in the number of
bank agents, ATMs and the EFTPOS machines and whilst not all machine access points
allow cash-in functions, the introduction of in-store or agent banking by commercial banks is
beginning to see an increase in cash-in and cash-out points.
In 2007 there were an average of 7 ATMs per 1,000km2 in Fiji and this had increased to 12
by 2012. Similarly, there were an average of 72 EFTPOS machines per 1,000km2 in 2007
and this had increased to 208 in 2012.
The introduction of mobile network operators into the financial services and products space,
through e-money transfers and bill payments, have further increased the outreach of financial
inclusion. Embracing technology has enabled us to increase delivery channels to reach our
people.
Affordability
Given our similar problems in small island economies and the limited resources, the services
provided will only be meaningfully utilised, and our efforts successful, if these services are
affordable to the unbanked. All accessibility will be useless if our people are not in a position
to pay for these services. The use of technology has brought about cost effectiveness in the
delivery of these financial services.
What does enhancing impact mean?
Ladies and Gentlemen, let me now turn to the "impact" aspect of our theme. This is very
important and I am glad that this is in the theme of this forum because it emphasises the
fundamental reasons why we are doing what we are doing in this area. All the financial
inclusion interventions we are embarking on must translate into a measureable outcome that
impacts and enhances the lives of our people. All our strategies and policies must, in the
end, have a measurable impact on our own individual countries and our region. If this is not
our ultimate aim, then all we are undertaking is just another program that has no real
purpose.
Measurable impact should be realised in the disposable income of the citizens of our
respective countries. An increase in disposable income can lead to increased savings,
consumption and investments. This should have a positive effect on our economies. When
we realise this impact, it would then have a flow on effect in our region.
Microfinance and financial inclusion are really still in their "early" days in our countries. The
time from intervention to realising the full impact is yet to materialise on a wide scale,
however, it is important to ensure that the benefits filter through. Having indicators linking the
various phases to the ultimate benefits of individual disposable income and country income,
is important and must be put in place. In Fiji we have only just started to document financial
inclusion indicators to cover access and usage, but our goal must be to link the indicators to
show the effects or impact on individual income and country income as a result of financial
inclusion.
Progress in Fiji
Ladies and Gentlemen, I know there will be a special case study session on Financial
Inclusion in Fiji on Thursday, where our recent experiences will be discussed in detail by the
Chairpersons of the three National Taskforce working groups. However, it will be remiss of
me if I did not at least give you a flavour of some of the important milestones in our journey
so far.
In November 2009, following a meeting of all stakeholders when we agreed to establish the
National Financial Inclusion Taskforce, we had set ourselves a quantifiable target of reaching
150,000 unbanked Fijians by the year 2014. At the time we felt this represented roughly a
half of our underserved population and I am happy to say that we have now reached
93 percent of the initial target.
But this has not been our only focus over the past three and a half years. In collaboration
with our stakeholders some of our other achievements and initiatives include:
•
Getting the involvement of all stakeholders (ours is a model of team work with all
wanting to participate);
•
The establishment of a National Financial Inclusion Strategy;
• The completion of National Financial Competency Surveys;
•
The development and establishment of a National Financial Literacy Strategy;
• The holding of Financial Inclusion Expositions to create awareness in remote parts
of the country (we have completed 10 to date);
• The establishment of a set of Financial Inclusion Indicators to measure access and
usage;
• Established policies around Consumer Protection to ensure transparency and
fairness;
• The integration of the financial education (FinED) into the existing schools
curriculum from Class 1 to Form 6 (year 1 to year 12);
•
Establishment of Microfinance Units within each commercial bank branch;
•
The development and implementation of micro insurance policies; and,
•
The establishment of a policy framework for branchless (agent) banking
•
We are also in the final phase of completing our mapping exercise of all financial
service access points and coverage across Fiji.
In the first half of 2014, we will be seriously reviewing our goals with the intention of raising
the bar a bit higher. We are committed and resolved to achieving bigger results in order to
make the impact needed for all Fijians. We will continue to make financial inclusion visible
through the varying levels of stakeholders from Government to the very people that are
unbanked or underserved.
Ladies and Gentlemen, at the heart of all our enthusiasm for financial inclusion is the passion
to bring our people out of poverty and provide them the hand-up to make something better of
their lives and the lives of their families. It is not about free hand-outs, rather it is all about the
desire to provide the necessary tools and access to enable the underserved to make their
own way.
Maya declaration award
Some of you may be aware of the Maya Declaration Award that was recently presented to
the Reserve Bank of Fiji at the 5th Alliance for Financial Inclusion (AFI) Global Policy Forum
in Kuala Lumpur, Malaysia.
The Maya Declaration is the first global and measurable set of commitments by developing
and emerging countries to unlock the economic and social potential of the 2.5 billion
unbanked people that I had referred to earlier. More than 80 countries representing over
75 percent of the world's unbanked population have supported the declaration and Fiji is one
of them.
This award given to Fiji simply confirms that, though we are small island nations, we can be
voted ahead of the bigger nations because of what we believe in and how we set ourselves
up to achieving our goals. I would just like to say that this award does not belong to the
Reserve Bank, but to all the committed stakeholders, (those individuals, financial institutions,
agencies, authorities, NGOs and donors) that we have working with us. We are a model of
cooperation and this is why we are successful.
Concluding statement
To conclude Ladies and Gentlemen, financial inclusion is a key step in building the
foundation of a prosperous nation. We have all recognised this and that is why we are here
today. While we may be at different stages of development in this area, we all share what the
ideal goal should be.
I am encouraged and excited about the program the organisers have put together for this
Forum. I note the various innovations and initiatives that will be shared to foster financial
inclusion in the Pacific. We even have choices in terms of which sessions to attend. In this
Forum, we have the perfect platform to share, learn and affirm our commitment in advancing
financial inclusion across the region.
I urge you all to ask the questions that will assist you in your drive to build on financial
inclusion when you get back home. Make the necessary permanent contacts with your
Pacific colleagues and other agencies, so that information sharing is always just a click
away, at your fingertips.
But through all this, don't forget that you are in Fiji! Please take some personal time to enjoy
what our country has to offer. We are known to be pretty friendly. Spend some money,
preferably supporting some of our small and micro entrepreneurs!
Finally, I wish you all a safe and productive stay and a safe journey home when the time
comes to say our goodbyes.
Vinaka vakalevu.