MICROCAPITAL BRIEF: CBSI, SINPF Launch LoMobile, Offering Digital Access to youSave Accounts for Self-employed Workers in Solomon Islands

The Central Bank of Solomon Islands (CBSI) and the Solomon Islands National Provident Fund (SINPF), a government-backed retirement trust, recently launched LoMobile, a digital savings channel that allows SINPF account holders to purchase mobile airtime credit to make deposits into their youSave accounts through simple mobile phones. As members no longer have to visit any of the three SINPF offices in the country to make a deposit, the process is now “easier and safer.” The new service also allows customers to check their account balances, and it offers a toll-free telephone number for customer service.

YouSave LoMobile, which does not require a data connection, is available in areas with mobile connectivity via Solomon Telekom or Bmobile. Solomon Telekom has locations in all of the country’s provinces, and Bmobile operates mainly in Guadalcanal, Malaita, Central Province and Western Province.

CBSI Governor Luke Forau said, “We are really supportive of this new mobile service from SINPF, because it will really improve access and usage of long-term savings products, especially for those communities of Solomon Islands that do not have bank branches and agents.”

YouSave, a savings plan designed to help self-employed islanders establish and contribute to retirement accounts as do “formally employed” citizens, was launched by SINPF and CBSI in 2017 with the support of the Pacific Financial Inclusion Programme (PFIP). The plan has approximately 15,000 members.

SINPF was established in 1973 under the Solomon Islands National Provident Fund Act, which provides that “every employer is required to pay to the Fund a sum equivalent to 12.5 percent of each employee’s total gross salary each month. This pay or contribution comprises 5 percent deducted from a member’s gross salary and a further 7.5 percent contributed by the employer on behalf of the employee/member.” Contributors to the savings plan have enjoyed an average annual interest rate of 8 percent since 2007 through 2017. As of 2014, the Fund has USD 2.4 billion in assets under management, and it has 170,000 members as of June 2015. More recent data is not available.

Launched in 2008, PFIP seeks to increase the number of Pacific Islanders who have ongoing access to affordable financial services as well as education on the use of these services. The programme is administered by the UN Capital Development Fund (UNCDF) and the UN Development Programme (UNDP) with funding from the governments of Australia and New Zealand as well as the European Union. As of 2018, PFIP has reached 2 million people in Fiji, Papua New Guinea, Samoa, the Solomon Islands, Timor Leste, Tonga and Vanuatu through 44 joint projects with financial service providers.

Established in 1983, CBSI is a financial institution that exercises “discretionary” control over the Solomon Islands’ entire monetary system. The bank works to define monetary policies, issue and manage currency and banking supervision, advise the government on monetary matters, promote financial stability and inclusion, and foster economic development within the country. In 2018, the bank reported total assets amounting to USD 5.5 billion.

By Anna Gravois, Research Associate

Sources and Additional Resources

PFIP press release
http://www.pfip.org/newsroom/programme-update/2019-2/you-can-now-save-for-your-retirement-using-airtime-credit/

CBSI homepage
http://www.cbsi.com.sb

CBSI 2018 financials
http://www.cbsi.com.sb/wp-content/uploads/2019/05/CBSI-Annual-Report-2018_-2MB.pdf

PFIP homepage
http://www.pfip.org

SINPF homepage
p://www.sinpf.org.sb

MicroCapital SINPF brief
https://www.microcapital.org/microcapital-brief-solomon-islands-national-provident-fund-launches-yousave-retirement-savings-plan-self-employed-support-uns-pfip/

Solomon Telekom homepage
https://www.ourtelekom.com.sb

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