By MATTHEW VARI
Sunday, August 2, 2015 (Sunday Chronicle, PNG)
THE Bank of Papua New Guinea (BPNG) in partnership with the World Bank, Institute of National Affairs, and National Statistics Office presented its findings from a portion of the National Financial Capability Survey (NFCS) at a one day workshop held on Tuesday at Laguna Hotel in Port Moresby.
PNG NFCS is the first national study of financial inclusion and financial capability in the country, and is one of a number of studies undertaken seeking to develop an understanding of financial inclusion, financial knowledge and skill and financial behaviour of Papua New Guinea households.
Due to issues with the logistics of accessing very remote areas and budget constraints the scope of the study was reduced to Momase Province (which comprised 40% of the sample surveys). Because of resource and time constraints, the study focused on completed focus provinces of Morobe and Madang.
INA Executive Director Paul Barker in his opening remarks emphasized that no single province could fully represent the spread and the whole of the country, however, pointed out that Morobe and Madang could do a good job at giving a snap shot of the country’s status.
“They (both) range from some of the highest mountain ranges in the land through to the islands; it includes some of the very remote districts.
“It does also include the relatively accessible Markham and Ramu valleys but also includes the second largest city in Papua New Guinea and also the center of Madang. It has got the full range of urban and remote rural.”
Deputy Governor of the Central Bank of PNG Benny Popoitai, when opening the workshop, said the survey being one of the initiatives the central bank was involved in terms of financial Inclusion like the CEFI (Center for Excellence in Financial Inclusion) under its Micro Finance Expansion Project.
“We have undertaken this to understand the behavior of our households in order to design correct solutions to certain financial behaviors.”
“Funding for the project is provided by the Korean Trust Fund of the World Bank along with counterpart funding from BPNG.”
The National sample is aimed to be developed from 5 selected provinces-targeting 1,000 households, from 2,000 interviews. Both woman and man who make most financial decisions on behalf of their household were interviewed.
Sampling Expert Dr Jonathan Sibley reiterated to those in attendance that the presentation was an interim one.
“This means that we have decided to do this and publish the report because this is the first population study of financial inclusion in Papua New Guinea,” Dr Sibley explained.
“It is the first picture that we have been able to get back that represents a bulk of the population.”
“What we have done is taken the data and it has been reweighted to make it representative of Morobe and Madang. We have come about to publish this as this is vital to the reiteration of BPNG Financial Inclusion and Financial Literacy Strategy.”
Findings from the Morobe Madang survey revealed a huge gap in access to financial services and products from rural to urban areas in the focused area.
It also highlighted a huge lack of understanding of financial products and services and the fees involved in the usage of such- including the large disparity between men and women and their access to financial products and services in both rural and urban areas.
“The thing that you find is that people in urban areas are confident in their ability to communicate in English, but people in rural areas say they cannot communicate effectively.”
“When you talk about the range of products again you see a very significant variance. In urban area a high number of men said that they had some form of savings, and significantly lower number of women. Credit use is high in urban and insurance is extremely low,” Sibley pointed out.
The study also revealed that even people who did not have an account said that they accessed funds electronically.
“We are looking at changing the questions in terms of account ownership. This is because we found that there were people using banking facilities through the accounts of others, which suggest that the effect of the financial system in Papua New Guinea may be higher than if you asked someone if they have an account.”
The full national financial capability survey will resume in selected provinces once funding is finalized, with funding submissions already put though to major financiers.
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