By MALUM NALU
TECHNOLOGICAL innovations are opening access to new business opportunities in Papua New Guinea, according to the World Bank, The National reports.
In its latest PNG Economic Briefing, The Challenge of Transforming Today’s Boom into Better Living Standards for Tomorrow, the bank said the private sector is generating new opportunities, through innovative business structures and technological changes that fit PNG’s conditions well.
“As many as two and a half million Papua New Guineans had mobile phone handsets by early this year, compared with only thousands four years previously,” the report said.
“This employs large number directly, for example, Digicel has a network of around 30,000 distributors of pre-paid credit vouchers either new to informal retail business or enjoying increased turnover.
“The benefits of mobile phone technology are particularly great for a country constrained by PNG’s geography and often remote population, for example, on access to finance.
“Bank of PNG issued Digicel with the country’s first mobile banking licence last February.”
The report said major retail banks were trialling new mobile banking platforms designed to enable access to financial services, particularly savings accounts.
Nationwide Microbank staff assisting a Porebada village woman to access her bank account on the mobile phone.-Picture courtesy of NATIONWIDE MICROBANK
“These services include mobile agents using low-cost computers connected with mobile phone networks to open bank accounts for individuals.
“Individuals and small businesses are then able to transfer funds by mobile phones and deposit and withdraw funds from local agents, located in trade stores, for example.
“This reduces the costs of dealing in cash – for example, of theft or in handling cash, which can be scarce in remote areas.”
The report said Bank South Pacific was targeting 200,000 holders of such accounts by 2014.
“These innovations have the potential to dramatically deepen many Papua New Guineans’ engagement with the cash economy,” it said.
“They can allow small farmers to shift from relying on opportunistic production of cash crops when cash is needed to more strategic production, so raising incomes and allowing savings to be built to buffer against shocks or to support investments in productive capacity.”
A “Financial Inclusion Day” is planned for later this year following a 2008 World Bank report which found out that only 8% of the population in PNG has access to financial services while a whopping 90% are “financially excluded”.
The Consultative Implementation and Monitoring Council’s informal economy committee, realising the seriousness of the problem, held a meeting on Tuesday to start planning for the day.
According to a CIMC concept paper presented at the committee meeting on Tuesday, PNG ranked at the bottom of the table among Asia-Pacific countries, when it came to “financial inclusion”.
“Some degree of financial exclusion exists in all countries, even wealthy ones, but PNG is at the bottom of the league table among countries in the Asia-Pacific region,” it said.
“Even allowing for the relatively low population densities and rugged topography that make the provision of any services difficult in PNG, the country has performed very poorly in providing access to formal financial services for its people.
“Only about 8% of its population is ‘financially included’, or 92% excluded.”