New bank­ing ser­vices open up ru­ral business

Made in PNG - - FEATURE -

In­no­va­tive tech­nol­ogy is help­ing BSP to bring bank­ing ser­vices to re­mote ar­eas of Pa­pua New Guinea, in the process help­ing to bring ru­ral busi­nesses into the for­mal econ­omy.

Un­til very re­cently, ac­cess to bank­ing in Pa­pua New Guinea was lim­ited to those who could travel to a bank branch to de­posit or with­draw their money. That could in­volve a long trip and an ex­pen­sive bus fare.

Ac­cord­ing to the Bank of Pa­pua New Guinea, an es­ti­mated 90% of the coun­try’s pop­u­la­tion is ‘un­banked’—that is, they do not use the bank­ing sys­tem and sub­sist en­tirely in the cash econ­omy.

For farm­ers, ac­cess to a bank ac­count will help to open up new mar­kets, since larger re­tail­ers in Port Moresby and other towns of­ten re­quire farm­ers to have a bank ac­count so that pay­ments can be made elec­tron­i­cally.

Drive into ru­ral ar­eas

The ma­jor banks are us­ing state-of-the-art tech­nol­ogy to bring in new cus­tomers in re­mote ru­ral ar­eas of PNG who have never used bank ac­counts be­fore. Some are landown­ers seek­ing to save the roy­al­ties from the mas­sive PNG LNG pro­ject. Although some ar­eas do not have ser­vice­able roads, peo­ple can ac­cess bank­ing ser­vices thanks to mo­bile phone cov­er­age.

With a more than 100% growth in trans­ac­tions since the start of the year, BSP’s branch­less bank­ing ser­vice is re­ally boom­ing, BSP Ru­ral Head Peter Komon told Made in PNG.

BSP’s Ru­ral Bank­ing pro­gram aims to grow to 200,000 cus­tomers in the ru­ral mar­ket seg­ment by the end of 2014, up from 120,000 cus­tomers cur­rently.

‘We are tar­get­ing the 8% of the pop­u­la­tion, liv­ing mainly in ru­ral ar­eas. So far, most are un­banked and rely on the risky and costly cash-based in­for­mal econ­omy to trans­act, save money and ac­cess credit,’ Komon said.

In ad­di­tion to mo­bile bank­ing, BSP also has a dense net­work of thou­sands of ATMs, EFT­POS merchants and agents, sig­nif­i­cantly in­creas­ing the cus­tomer’s abil­ity to ac­cess their bank ac­count and save.

Reach­ing out

While BSP dom­i­nates the re­tail and ru­ral mar­kets, its com­peti­tors have their own projects to reach out to re­mote com­mu­ni­ties.

West­pac PNG re­cently in­tro­duced in-store bank­ing in lo­cal trade stores in the New Ire­land prov­ince, and the ANZ has in­tro­duced its own mo­bile phone bank­ing tech­nol­ogy.

For its part, ANZ has set a tar­get in 2013 of in­tro­duc­ing mo­bile phone bank­ing to 50,000 ru­ral cus­tomers across PNG, Van­u­atu, Samoa and Solomon Is­lands.

BSP’s Komon pre­dicts it will re­quire a long-term in­vest­ment in time and re­sources to ed­u­cate PNG’s un­banked pop­u­la­tion of the ben­e­fits of join­ing the for­mal fi­nan­cial sys­tem and gain their con­fi­dence.

‘We are pre­par­ing the next gen­er­a­tion of cus­tomers,’ he said.

Farmer Ge­orge Waire of Ma­gautou vil­lage signs his new BSP card at Ma­gaut.

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