and allow it to collect public deposits. the licensing of the wmb portrays a new approach considered by the project and bpng to be an effective means to meet the expectations of the local people. the establishment of the lae branch of wau microbank should be seen as a sign of expansion of the microfinance sector in png as more entrepreneurs from the formal and informal sectors will now be served by this microbank. the morobe province has a vibrant economy and there are prospects for the expansion of the microbank to other areas of the province. the success of this branch will show the nation that a microbank can quickly become viable also in urban areas. this province is fortunate to have the microfinance policy of the government being tested with the establishment of the pilot microbank in wau as a ‘ laboratory ’ for testing microfinance products and methodologies. the province should embrace and support the microfinance initiatives as an alternate ‘ vehicle ’ for delivery of financial services to a wider sector of the urban and rural communities. the mcc supported by the bpng are working together to assist any institution, public or private, that wish to serve the microfinance market. i commend the project team from mcc and ibbm for extending the provision of microfinance services to lae city through the establishment of the branch of wau microbank. the bank also acknowledges the continued support of the donor organisations including the adb and ausaid without which this project would not have been established. i am sure your support will be extended to the other provinces as well. i also wish to thank the morobe provincial government and administration for taking a proactive stance in this expansion plan for the wmb. thank you ladies and gentlemen.

loi bakani : development of the financial system in papua new guinea speech by mr loi bakani, deputy governor of the bank of papua new guinea policy & regulation, at the launch of the lae branch of wau microbank, 22 april 2005. * * * hon. luther wenge, mp - governor of morobe mr. manasupe zurenuoc - provincial administrator & master of ceremony mr. werner schneider - adb rep, country res. mission ms. charlotte smith - ausaid representative ladies and gentlemen it gives me great pleasure to address this gathering to mark the launch of the lae branch of the wau microbank. this occasion marks another milestone in the development of the financial system in png, which is within the heart of the central bank ’ s function as a regulator of the financial system. the main functions of the bank of papua new guinea, as a regulator, are stipulated in the banks & financial institutions act 2000. these, among others, are : - to promote general stability and effective working of the financial system ; and - to supervise the financial institutions authorized by it. noting from the above functions, the bank is not mandated to undertake development activities. however, over the recent years the bank has taken on board some development activities aimed at developing the financial and capital markets in png. it has also been actively involved in strengthening and building capacities of some financial institutions so that these institutions can contribute effectively to the development of the financial sector. some of the development initiatives that the bank is actively involved include : savings and loan societies revitalization program ; establishment of port moresby stock exchange ; and png - adb microfinance & employment project. the bank contributes to the png - adb microfinance & employment project as the executing agent. the project is guided by a steering committee chaired by the deputy governor for policy & regulation. the bank has an internal working group and a unit responsible for microfinance. this structure was established in full recognition of the importance we place on the development of microfinance institutions in png, and its role in filling the gap in provisions of financial services in the rural communities. microfinance institutions ( mfis ) form a different tier of financial institutions that play an active part, through the informal and semi - formal sectors, in savings mobilization and the development of the financial system. these financial institutions that serve the disadvantaged majority equally require the central bank ’ s supervision and some