Financial technology and digital development initatives made possible by improved internet access in Papua New Guinea

The World Bank estimates that improving internet access in Papua New Guinea could boost GDP by $5bn and create an additional 300,000 jobs by 2040. The completion of the Coral Sea Cable System and the National Transmission Network is integral to ushering in a new era in which digital technology can help address PNG’s development and financial inclusion challenges. This is crucial, as an estimated two-thirds of the population lack access to formal financial services, while some 2m people are living below the poverty line. Financial exclusion remains the norm in rural communities, where 87% of PNG’s population reside, and, according to global industry trade body GSMA, less than one-third of the population has a mobile phone subscription.

Financial Inclusion 

Energised by the prospect of capital and technical support from the UN Capital Development Fund (UNCDF), the government is intent on bringing financial services to an additional 2m citizens, half of whom will be women, under its National Financial Inclusion Strategy 2016-20.

Digital finance initiatives are enabled by increasingly affordable and reliable mobile broadband coverage, as well as the ongoing rollout of the Retail Electronic Payment System, which will allow microfinance companies and other small financial establishments to enter the national payment system, as well as offer plastic cards and mobile payment services. This should allow for real-time interoperability between micro- and smallsized financial institutions and the country’s four major banks. Additionally, it is expected to provide a platform for innovative mobile solutions and the adoption of QR-code payments. Third-party payment services can now connect into the system to facilitate payments. Although only one bank is connected so far, more are likely to follow suit in 2020 and is expected to be a major driver of social development.

MiBank PNG already offers mobile financial services through its MiCash mobile wallet, with more than 30,000 accounts active across rural and urban areas as of December 2018. Vodafone also aspires to enter the market, and could operate a mobile wallet similar to the M-Pesa initiative that revolutionised the way people spend, save and send money in Kenya. In emerging economies across the globe financial services provided via mobile devices have had great success in reaching segments of society that have in the past been left out of the traditional banking system.

The government is also working with the private sector on a digital identification scheme, known as YuTru, that is aimed at assisting people who struggle to meet the formal identification requirements needed to open a bank account. Additionally, Bank of PNG, the central bank, has announced it is investigating leveraging blockchain technology as a platform to improve financial inclusion, exploiting the potential of such systems to strengthen value chains.

Multiplier Effect 

With this infrastructure in place, digital platforms can be used to bridge gaps in agriculture, education and health care service provision. For example, under the UNCDF’s Pacific Financial Inclusion Programme, ongoing projects in this vein include a pay-as-you-go platform for solar energy systems; expanded mobile health and life insurance platforms in rural areas; a microbank, which will leverage biometric data to facilitate basic banking; and a mobile banking system that connects rural suppliers of cocoa, copra and coffee with centralised financing.

In e-health, India’s ReferTech IT Solutions has developed a web-based patient management system and data analytics engine to be used in a tuberculosis clinic in Port Moresby, while UN Pulse Lab is working with Digicel to analyse anonymised call records to inform public policy and drive humanitarian action. However, the government has yet to formally respond to calls from the ICT industry for a white paper. Meanwhile, plans to implement a national ICT roadmap that identifies areas open to private sector investment have taken a back seat during a changeover in government in 2018.