Helping 80% of low income earners

Robert Matau




There are 6.5 million South Pacific islanders representing 80 percent of low income earners in the region craving to access financial services.
Whether it is the canteen lady or the small business grog seller who sells packets of yaqona from the large wholesaler, the money from these businesses do not go to the banks.
Where the banks have failed to support people like canteen and small business owners, microfinance organisations have taken up the challenge for the poor section of the community who still hope to help themselves.
The Foundation for Development Corporation Pacific (FDCP) representative Luse Kinivuwai believes that microfinance has proven its effectiveness as an instrument to overcome poverty.
The Microfinance Pasifika Network, an initiative of FDCP, is an alliance of institutions committed to supporting disadvantaged people in the Pacific to improve their quality of life, through the provision of inclusive and sustainable financial services such as savings, credit, remittances and payment services and insurance, she said.
A recent report commissioned by UNDP and UNCDF estimated that only 20 percent of the populations in Vanuatu, Solomon Islands, Tuvalu and Kiribati have access to financial services.
Microfinance Pasifika Network, an initiative of the FDCP, is the pre-eminent microfinance and financial sector development network in the Pacific.
The network was launched in June 2006 in Port Vila, Vanuatu, following a year of consultation led by the Foundation for Development Cooperation (FDC). FDC currently acts as the network’s secretariat in Suva, Fiji.
Members of the network include 18 key microfinance and financial stakeholders from Australia, Fiji, Federated States of Micronesia, Papua New Guinea, Samoa, Marshall Islands, Tonga and Vanuatu.
However, it is working on expanding its membership by actively promoting financial inclusion and does so by focusing its activities on:
• Capacity-building for microfinance institutions through training courses, workshops and exposure visits.
• Information sharing via the website, working groups, staff exchanges and conferences.
• Research through microfinance country profiles and cross-regional research on new or cutting-edge issues in microfinance.
• Promoting transparency and accountability.
• Advocacy.
The network will meet in Nadi from July 13-17 at the Radisson Resort.
Kinivuwai said in Fiji, the National Centre for Small & Micro Enterprise Development has over 20,000 savers and over a $1 million in savings made from hard-earned earnings.
She said countries like Samoa have a 99.9 percent repayment rate while Vanuatu has recorded a 0.05 percent defaulting rate from people under the wings of microfinance.
“The advantage of our programmes are that women in business do not have to catch a bus to get to town or queue in a bank to save or make loan repayments,” Kinivuwai said.
“We have seen first timers take a $100 loan for starters, then the spinoff allows them to take another loan after paying off the first one for another $300 while some of the businesspeople have taken loans of up to $10,000.”
PNG has 30 microfinancing institutions while Samoa has three and Fiji nine. She says it cannot be overemphasised the extent to which technology has a critical role to play in the delivery of financial services including Fiji.
“The deregulation of the mobile phone market and the development of card payment systems have raised the opportunity for achieving greater efficiencies and outreach in the delivery of financial services,” she said.
“The cost of telecommunications in Fiji has reduced in the last two years; the high volume sale of affordable mobile phones has enabled majority of the population to have access to a phones.
“The mobile phone customer base has grown to 700,000 (83.6% of population) at the beginning of 2009,” she said.