The Alliance for Financial Inclusion (AFI) successfully co-hosted, along with the Reserve Bank of Vanuatu (RBV), the 2nd Annual AFI Pacific Islands Regional Initiative (PIRI) Forum on 2-3 June 2016 in Port Vila, Vanuatu. The forum brought together approximately 50 high-level policymakers, regulators, stakeholders and partners to hold discussions under the overarching theme of “Islands of Inclusive Finance—SMEs and Financial Inclusion in the Pacific”.
The Honorable Deputy Prime Minister of the Republic of Vanuatu, Mr. Joe Natuman, delivered the keynote address. Opening remarks were also offered by Mr. Denton Rarawa, Governor at the Central Bank of Solomon Islands (CBSI) and PIRI Chairperson, as well as Mr. Norbert Mumba, Deputy Executive Director at AFI. Mr. Simeon Athy, Governor of RBV was in attendance along with other Governors and Deputy Governors from AFI member institutions. Mr. Athy also delivered the event’s closing remarks.
“This PIRI meeting will once again provide a learning opportunity to share our respective experiences in our work in building a more inclusive regional community as indeed we share a similar vision where financial services are accessible by all Pacific Islanders,” said Mr. Natuman. “This vision includes a regional community where every one of our brothers and sisters share an equal opportunity.”
“It is very important that we work together, we share our experiences and we draw on our successes. I am pleased all governors and leaders of PIRI are behind us,” said Mr. Athy.
Importantly, at the PIRI Leaders’ Roundtable, high-level leadership formally accepted and approved documentation outlining the key activities and outcomes of PIRI, along with the identification of current trends for prioritization moving forward, which were outlined during the previous day’s Experts Group Financial Inclusion Policy (EGFIP) Meeting.
Participant discourse revolved around deepening dialogue for exploring and promoting SME finance, particularly for women entrepreneurs and women-owned enterprises, as well as identifying the roles of policymakers and regulators in promoting an enabling environment for small and medium enterprises.
“Financial inclusion is a core mandate for Solomon Islands—it complements our other core activities. If people are excluded, that can be a cause for instability. It supplements financial stability,” said Mr. Rarawa. “And SMEs are important drivers of economic development—sadly we have incomplete information on this market. We need to better understand the SME market … and one important step is for PIRI to adopt a standard definition for SMEs.”
“Lack of access to finance is widely reported as one of the main barriers to growth for SMEs,” said Mr. Mumba. “As policymakers and financial regulators, we have important roles to play in creating a more enabling environment to support the growth of SMEs. We must embrace those roles and capitalize on the opportunities in front of us.”
A wide variety of topics related to SME finance and the Pacific were covered. As a starting point, the forum opened with a session on the status and progress of financial inclusion in the region to examine the current state of financial inclusion in the Pacific Islands as well as offer an update on the Maya Declaration commitments from each member institution, and to highlight potential regional financial inclusion initiatives.
Representatives from Fiji, Papua New Guinea and Timor-Leste identified financial literacy and financial education as an integral component of their current progress in terms of awareness and expositions, training/piloting, and savings campaigns. Furthermore, Fiji identified gaps on gender and ethnicity to be addressed while PNG noted distribution channels to be a challenge and going forward will work on mapping of access points. On the role of data, Mr. Barry Whiteside, Governor at the Reserve Bank of Fiji, stated: “If you do not have good data, then you’re not going to get anywhere in terms of measuring and benchmarking.”
The opening morning also included a session called “Developing a Holistic Ecosystem to Support SME Finance”, where panelists cited the need to create an all-inclusive and coordinated framework to promoting the development of the SME sector. Lessons learned from Malaysia highlighted that for effective development of the SME sector, the financial inclusion initiative must be addressed at national levels (government involvement). The panel noted that with the exception of Fiji, other Pacific Island Countries (PICs) have yet to set up a fully functional and coordinated framework for SME development.
“Financial institutions play a particularly important role in driving this agenda. Developing innovative financing models that go beyond traditional bank lending is crucial to providing timely financing opportunities for SMEs based on their needs and stages of business growth,” said Mr. Eliki Boletawa, Head of Policy Programs and Regional Initiatives at AFI.
The first day concluded with sessions on:
The final day of the forum featured a key session on policies and regulatory approaches to enhance access of women-owned SMEs to financial services. It was pointed out that in the Pacific, women entrepreneurs face significant challenges, including, relatively high transportation costs due to remoteness and isolation, a small domestic market, susceptibility to natural disasters, and limited capacity in the public and private sector—women entrepreneurs are also less likely to have land titles and are often at a disadvantage due to existing family, marriage and inheritance laws and practices.
“Access to finance is a human right regardless of whether that person is male or female,” said Ms. Julie-Ann Sala, CEO at the Vanuatu-based microfinance institution VANWOODS.
“There are steep economic costs to excluding women from participation in the economy—particularly women entrepreneurs and women-owned enterprises,” said Mr. Mumba. “We can no longer afford to have women relegated to the margins of society. PIRI members must work toward bridging this gap.”
In this vein, it was also noted that with over one billion unbanked women globally, AFI members are in a strong position to support and enhance women’s financial inclusion. In fact, the urgency of the issue prompted the AFI Board of Directors to approve the establishment of a High-Level Committee on Gender and Women’s Financial Inclusion earlier this year. This committee will provide leadership and drive initiatives to accelerate women’s financial inclusion.
And as recently as April, AFI held the high-level conference “Bridging the Gap: Commitments and Actions for Women’s Financial Inclusion” in Tanzania. It was there the AFI network witnessed a significant milestone with the endorsement of the “Zero Draft AFI Action Plan for Gender and Women’s Financial Inclusion”. The Action Plan was endorsed by PIRI members, and will be presented to all AFI members for adoption and implementation at the Annual General Meeting ahead of the 2016 Global Policy Forum (GPF) in Fiji this September.
Other important topics discussed at the PIRI Forum included:
“PIRI members once again held this important forum for regional policymakers to exchange experience and discuss strategies for addressing their evolving financial inclusion mandate,” stated Mr. Mark Flaming, Manager at PFIP. “It represents a core strength of the region, as well as a sincere interest in coordination and learning from each other.”
About the AFI Pacific Islands Regional Initiative (PIRI)
The 2015 launch of PIRI in Timor-Leste established a long-term program with a common vision to ensure financial services are widely accessed throughout a region with one of the highest unbanked rates globally. PIRI members implement a peer-learning and knowledge-sharing approach to a variety of financial inclusion policy areas highly relevant for all small-island nations in the Pacific. PIRI’s mission is to create and foster conditions that lead to the financial empowerment of all Pacific Islanders.
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