Leasi Papali'i Scanlan: Financial inclusion and mobile banking in Samoa
Address by Mr Leasi Papali'i Scanlan, Governor of the Central Bank of Samoa, at the official
opening of the Workshop/Information Exchange on "Financial Inclusion and Mobile Banking
in Samoa", Apia, 20 January 2010.
* * *
At the outset, I would like to thank all of you for accepting our invitation to participate in
today's Workshop on Mobile Money and Mobile Banking, which are two key strategies for
implementing what is known as Financial Inclusion. I would also like to extend a warm
welcome to our partners on financial inclusion in the Pacific, Mr. Tillman Bruett and
Mr. Michael McCaffrey of the United Nations Capital Development Fund's Pacific
Financial Inclusion Program.
As stated in our invitation letter, you have been identified as Individuals and Representatives
of Organizations with the potential to make a significant contribution to financial inclusion
and financial literacy; especially those of you with an interest in mobile telephones and
financial services businesses in general. I trust that the free exchange of your valuable
knowledge and experiences, will not only greatly benefit the other Participants of today's
Workshop but also Financial Inclusion (as a whole) in Samoa.
In July 2009, I attended a Pacific Regional Meeting in Fiji to discuss the advent of
Microfinance in the Pacific. At this Meeting, I was introduced to the concept of Financial
Inclusion, and I was subsequently convinced of its relevance and importance to Samoa.
As you will be hearing from Mr. Tillman Bruett, Financial Inclusion is simply described as the
extension of financial services, at affordable costs, to reach those that are classified as the
"unbanked". These are people who have little or no access to formal financial services
generally, not only as a result of the lack of financial education, but also due to their rural and
isolated locations or low incomes. The purpose of the many Financial Inclusion strategies
that are being implemented around the world, is to connect these "unbanked" people with the
formal banking system, to enable them benefit from the various financial services that are
available, and thus help equip them with the confidence to make informed financial
decisions.
Financial Inclusion has the potential to play a very important role in Samoa's economic
development. Traditionally, much of the efforts of the Central Bank of Samoa (like most other
central banks in the world) have been concentrated on promoting financial and economic
stability, on the "macro" level. Unfortunately, there has not been enough attention given
directly to developing and promoting the "micro" sector of the economy, which accounts for
the major part of the population.
Reflecting the leading roles increasingly played by many overseas central banks, in driving
Financial Inclusion in their economies, the Board of the Central Bank of Samoa recently
approved for the Bank's mandate to be expanded to include Financial Inclusion. No longer
will the Central Bank of Samoa stand on the sidelines and play only a promotional role, and
hoping for the desired economic and financial results to eventuate.
The adoption of Financial Inclusion, as part of our mandate will ensure that the Central Bank
takes on a more holistic approach to promoting and maintaining financial and economic
stability in the country. Moreover, it would lend support to Government's efforts to facilitate
the achievement by Samoa of the Millennium Development Goals, on a timely basis.
Here at the Central Bank of Samoa, Financial Inclusion is tasked to the Financial Research
and Markets Development Area, headed by Deputy Governor Losefo Bourne. The Financial
Markets Department assumes the role of Financial Inclusion Secretariat, supported by a
financial inclusion team comprising of selected staff from the Research and Statistics,
Banking and Corporate Services and Financial Institutions Departments.
Financial Inclusion is not a completely new concept, as some elements of it (particularly
Micro Credit Schemes) have already been implemented in some countries of the Pacific,
including here Samoa. And, these micro-credit schemes have been promoted mostly through
private Non-Government Organisations.
In the Pacific Region, Financial Inclusion is being spearheaded by the Pacific Financial
Inclusion Program of the United Nations Capital Development Fund (UNCDF), with their
Head Office located in Fiji. Recognizing its great potential to alleviate poverty in the Pacific,
the UNCDF has joined forces with the UNDP, the European Union, AUSAID and other
Donor Agencies together with Governments and central banks in the region, to drive and
spread the benefits of financial inclusion throughout the Pacific Island Countries.
For today's Workshop, the focus will be on Mobile Money and Banking, an important
Financial Inclusion strategy already launched in many developing countries. And, I don't want
to pretend that I am an expert on mobile money or mobile banking. Suffice it to say, that
these Initiatives have presented great opportunities for the previously unbanked
communities in large, developing countries such as Kenya, the Philippines, Mexico, and
Brazil to name a few.
Here at the Central Bank of Samoa, we believe that the introduction of mobile money and
mobile banking in the domestic economy will be hugely beneficial. It will allow better
financial access to our low-income community in the rural and isolated areas as well as to
improve and speed up our payments system.
In launching an Automatic Teller Machine (or ATM) for one of the commercial banks
yesterday, I acknowledged the benefits of having and maintaining bank branches out in the
rural areas, as these will help increase access to financial services. It is expected that some
of these rural branches will not be financially viable in the short term. But, in the longer term,
as more people become more financial literate, business activities will increase and thus help
generate more revenue for these bank branches.
Financial literacy and financial inclusion also has great potential to address several issues
specific to the economy of Samoa, like reducing the current relatively high costs of
Remittances into the country.
Today's Exchange of Information on Mobile Money and Mobile Banking kick starts the
Central Bank's involvement in Financial Inclusion. To this end, I would like to acknowledge,
with appreciation, the kind assistance of the Pacific Financial Inclusion Program of the
UNCDF and AUSAID in assisting the Bank in its new role by co-hosting and co-sponsoring
today's Workshop and Information Exchange.
Ladies and Gentlemen, I encourage you to share generously your knowledge and
experiences in your specific fields of expertise so that we are able to put together an effective
and secure mobile money and banking network for Samoa.
Because you may not have sufficient time to fully cover the important topics that you are
going to discuss, I hope that at the end of the formal part of the Workshop, we can all relax
and continue the dialogue over some refreshments.
With these brief remarks, I would now like to welcome to the podium our Information
Exchange Co-ordinators, Mr. Tillman Bruett and Mr. Michael McCaffrey, of the UNCDF
Pacific Financial Inclusion Program.
Thank you for your attention.
Soifua.