NEWS WIRE: Business: Microfinance Under the Spotlight

Source: Islands Business

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Papua New Guinea to Host Inaugural Pacific Microfinance Week

Moves to strengthen the focus on microfinance in the Pacific region will be put under the spotlight during a regional-level gathering of stakeholders in Papua New Guinea later this month.

The Pacific Microfinance Week, scheduled for August 27-31, is the inaugural symposium of Microfinance Pasifika Network, an organisation with membership comprising countries in the region, as well as NGOs involved in supporting the provision of microfinance services.

Microfinance Pacifika secretariat, Brisbane-based Foundation for Development Cooperation (FDC), said it will be the first event of its kind to be held in the Pacific.

The aim is to bring together as many experts and practitioners as possible from across the Pacific for the promotion of greater financial inclusion within the Pacific Islands Countries (PICs).

“Presently, the vast majority of Pacific islanders have no or limited access to financial services, pensions, credit cards, savings accounts, and so on,” said FDC executive director, Craig Wilson, in an interview with ISLANDS BUSINESS.

“Geographic dispersal is one reason for this. Another is that service providers have been somewhat inert in seeking the large number of unbanked people in the Pacific as a business opportunity.”

While the availability of financial services is an important factor in the provision of microfinance services, the Pacific has largely lagged behind because of the inherent dispersal of its islands.

“Often, people in outlying places require access to the ability to save money as much as they need credit. Often, they need efficient ways to receive remittances from family members abroad. All these things have a direct impact on livelihoods.

“But a small population, relatively poor, geographically spread poses considerable challenges to banks and other financial service providers working in the Pacific.”

This, however, is turning around as new technologies and new approaches have begun to emerge. ANZ’s rural banking services and solar-powered ATMs are starting to make a difference. UNDP is planning on championing the use of technology to expand the availability of financial services.

Microfinance providers such as PNG Microfinance Ltd are on track to secure one million customers in PNG by 2015 using a low-cost branch network. Greater access to financial services is an important way to reduce poverty and grow economies, said Wilson.

He added that the provision of microfinance services to inhabitants of the Pacific tends to be hampered by lack of expertise, lack of access to information and more importantly, funding. These are barriers to the region gaining full potential in the delivery of microfinance services.

“We believe the new organic microfinance service providers can successfully emerge in the Pacific if coupled with good systems, staff and approaches. To this end, one of the objectives of the Pacific Microfinance Week 2007 is to promote greater sharing of intra-Pacific microfinance operations,” Wilson added.

“In addition, the Microfinance Pacifika Network which has initiated the Pacific Microfinance Week 2007, will shortly be setting up a Pacific Resource Centre for Microfinance (www.microfinancepacifika.com), an online portal which will contain an enormous database of information for microfinance practitioners in the Pacific.”

Wilson also called on more active government support in the areas of policy and regulation.

“Rarely is funding the answer. Rather, government and development partner support should go into making the policy and regulatory environment for microfinance more supportive, and provide more opportunities for training.

For example, a regional microfinance training institute would be helpful and FDC is looking for partners to support this.”

There are hopes, he added, to have the event become a flagship for the Microfinance Pacifika Network and that members and participants will find it useful to hold it annually.

“Over time, we hope that the learning achieved and decisions made at the Pacific Microfinance Week 2007 will make an important difference to the lives of the many millions of unbanked Pacific islanders,” Wilson said.

The Pacific Microfinance Week 2007 is being supported by the International Finance Corporation, the business arm of the World Bank, and Asian Development Bank.

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