New technologies to capture rural dwellers

Robert Matau

October 2009 Issue

Making profits is not the only objective of the National Bank of Vanuatu (NBV). For them, it is also about reaching out to those who have never banked a cent in their lives.
It wants to include the disadvantaged rural dwellers so that more people can participate in the economy, rather than just concentrating on the big businessmen and wage earners.
How does NBV intend to do this? The bank is hoping to focus on microfinancing activities that will combine normal banking with highly developed technologies and in some cases a motorcycle or two to expand its client base.
Not wanting to let the cat out of the bag, NBV’s managing director Bob Hughes told ISLANDS BUSINESS it was too early to make an announcement. He wants to have all the necessary systems in place before the bank launches its new initiatives in public.
“We have had a few delays on the way but we have actually started things on our own,” he said.
“Hopefully with the new technology available we should be able to be up and running in full swing by early next year.”
While the bank will be eyeing telecommunication systems with firms like Digicel, it is also looking elsewhere to try and get the most at a reasonable cost.
In conjunction with the Asian Development Bank and United Nations Development Programme, the bank is expected to achieve this goal.
In the bank’s 2008 annual report, Hughes highlighted their commitment to rural banking, which is central to NBV’s corporate identity as Vanuatu’s Own Bank.
In addition to the two urban branches of Port Vila and Luganville, NBV maintains another 22 branches in rural areas, spread over 15 islands.
“Rural banking has many challenges and NBV recognises there are many areas in which the bank can continue to improve and develop.
“We invest heavily in both human and technical capacity to serve this end. For example, NBV has recently created a dedicated Rural Banking Services Department, including the appointment of an experienced ni-Vanuatu Executive Manager,” Hughes said.
A highlight of the rural banking services is the micro-loan product delivered via NBV bank officers who visit villages by motorbike, the managing director said.
“Since 2005, NBV has successfully lent more than VT600 million to ni-Vanuatu businesses in rural areas. Micro-loans now make up more than 40 percent of NBV’s total loan portfolio.
“We’re really proud of our achievements and determined to continue to grow the bank and improve our services.”
Over the next three years, NBV’s aim for rural banking and microfinance is to extend its e-banking network to an additional five provincial branches and enable an additional 13,000 rural producers and micro-entrepreneurs to be banked.
To help achieve this end, PFIP (Pacific Financial Inclusion Programme) will contribute US$212,000 to support NBV’s current investment in IT and communications infrastructure for rural banking.
“We appreciate the support of PFIP and their keen understanding of the challenges we face to deliver banking services in the rural areas,” Hughes said.
“Rural banking and microfinance are a very important part of NBVs corporate mission and we are determined to do everything we can to enhance our performance in this area.”
Tillman Bruett, PFIP Project Manager and Advisor, said: “We acknowledge the commitment and large investment from NBV to operate outside of the main cities as well as the early technical support of NBV by the Asian Development Bank. We are confident that our additional investment in new technologies will achieve results so that NBV can realise its mission to creating greater financial security and economic opportunity for the ni-Vanuatu in rural areas.”
PFIP is a Pacific-wide programme helping provide sustainable financial services to low income households. It is funded by the United Nations Capital Development Fund (UNCDF), European Union, the United Nations Development Programme (UNDP) and the governments of Australia and New Zealand through their contributions to the Pacific Centre from which PFIP operates.
PFIP runs programmes in Papua New Guinea, Fiji, Vanuatu, Solomon Islands and Samoa and its priorities include financial literacy, sharing knowledge on microfinance, and empowering microfinance institutions.