Rural banking goes regional

Dionisia Tabureguci

Over six million people in the region are starved of any form of banking service, something that's considered an essential part of everyday life in this day and age.

Tapping the unbanked: rural banking in Fiji

This figure has been tallied by the Australia and New Zealand (ANZ) Banking and is a rough estimation of what could possibly be the glaring reality out there in these geographically challenged parts of the world.

As the bank is poised to take its rural banking service regional, its head of rural banking services in Fiji, Carolyn Blacklock says that figure explains why so much interest has been generated by its pilot project in Fiji.

In fact, the Pacific is not the only one watching. “There's been a large amount of interest from around the world,” she says.

“We have been invited to conferences in most continents. But at this point, we do not intend to extend the rural banking concept outside the Pacific. We have a lot of interest from most Pacific islands nations.

“Obviously, this is due to the high number, estimated at six million people, who remain unbanked in the region.”

Barely a year after it launched its rural banking service in Fiji, ANZ is getting the groundwork ready to cast its net and fish the loose change out of the pockets of these unbanked population.

Its Fiji project, which it is running with the support of the United Nations Development Programme's financial literacy programme, is the first of its kind for the bank and has been described as a success, so far exceeding anyone's expectation.

Five weeks after its very first vehicle took to the bumpy and dusty gravelled Tailevu roads, the bank managed to mobilise over F$40,000 and 4000 accounts had been opened.

By last month, five vehicles had been rolled out, over 20,000 people had opened their accounts, and over $700,000 had been deposited by these new customers.

Blacklock says the bank headquarters is happy and it is likely the project will be well supported by the bank's top management.

“The work in the Pacific to bank the unbanked is very much in line with ANZ's overall strategy to improve financial literacy and access to financial services.”

Blacklock agrees that whatever service delivered it has to be well understood and properly managed, or it could become a costly exercise.

“Its collapse would only serve to further deprive the rural population of what should now be considered an essential service. This is the reason why the bank went to great lengths to study the markets before landing the Fiji project last October.”

It is expected the same synergy will make its way to other Pacific islands nations that ANZ chooses to export its service to.

With Fiji already in the bag, ANZ's next target will most likely be a country among the 11 Pacific nations in which it is represented.

Says Blacklock: “We have no definitive list of what countries we will go to because we are still very much in the fact-finding stage.

“But by mid-year, we hope to have some clearer idea. It is not simply a matter of choosing a country and then rolling out what we have done in Fiji.

“It is important that we first understand the facts surrounding the unbanked and also what their banking needs are. Whatever proposition, it is, it needs to be sustainable.

“ANZ has a presence in 11 Pacific Islands countries and obviously, these countries will be first on our list to conduct fact finding missions: Papua New Guinea, Solomon Islands, Timor Leste (East Timor), Vanuatu, New Caledonia, Samoa, American Samoa, Tonga, Cook Islands, Kiribati and obviously, Fiji.”

The Fiji project which is already in its late embryonic stage is now available to most rural Viti Levu and Vanua Levu, Fiji's two main islands.

While the bank is still working on reaching out to other Pacific islands nations, it is also preparing to launch a new loans product.

“We are very excited that our micro-loan product will be released in early May.

“This product will be available to people who have saved with the ANZ rural banking on a regular basis for at least six months.

“The loans will be available for any worthwhile purpose and people can borrow from as little as $100 and up to $2000 with repayments available for up to two years.

“It is very similar to a microfinance product but with a low bank interest rate,” says Blacklock.

This is expected to unlock the potential for economic activities in the rural areas of Fiji. It will only be a matter of time before it makes its way into rural Pacific.