Financial accessibility below global and regional levels: Study reveals

Caption:  Dr Jonathan Sibley

By MATTHEW VARI 

Sunday, August 2, 2015 (Sunday Chronicle, PNG)

INITIAL findings into the National Financial Capability Survey conducted by the Bank of Papua New Guinea through the Institute of National Affairs through the support of the World Bank have revealed that despite the growth in accessibility in financial services in the country, PNG still lacks sufficient access below the global and regional average levels.

Presenting findings on their initial study of the Financial Capability of households in both Morobe and Madang- the national figures derived from the Central Bank in comparison to the World Bank’s Global Findex database- there were 9,257 financial services access points in the country in 2012.

By March of 2015 it has increased to 11,015 financial services access points; however, overall network density in PNG is low compared to other countries.

In 2013 there were 1.9 bank branches per 100,000 adults, with the global average at 12.6, which understandably includes highly developed financial systems.

“The Pacific Islands average 18.9 per 100,000 adults. In PNG there aren’t as many branches that people can go to like many other countries,” said Sampling Experts Dr Jonathan Sibley.

“There are 16.5 agents per 100,000 adults in 2013, but the figure is outdated as the figure has increased with BSP rolling out its agents to rural areas in the country.”

“With countries like Kenya 268, Peru 118, Tanzania 57 per 100,000 adults, the density of the agent network in PNG is still quite low.”

According to figures presented, in 2013 Automated Teller Machine (ATM) access in the country was at 8.4 ATMs per 100,000 adults, with the global average at 34 per 100,000 adult. The ability to access financial services in the country is more constrained than in other countries

“Levels of financial inclusion in PNG are low- there have been various estimates done by BPNG, ADB (Asian Development Bank), are estimates only because there has been no population study.”

“It is estimated somewhere between 7 and 15% of the population has an account with a regulated institution.”

“BPNG estimates that 44-58% of population has an unmet demand in deposit services and 54 – 64% of the economically active population has no access to credit facilities.”

“That is the national picture, but I think you all know coming out of this presentation is that the divide between rural and urban centers is far,” Sibley added.