MiBank is working with Empawa, a local provider of solar power units in PNG to target off-grid homes to supply cheaper, more sustainable, green energy while at the same time creating access to a range of financial services through mobile phones.
The pilot rollout will see a network of agents promoting the environmentally-friendly solar power kits and explaining the mobile payment platform in four large village communities in the Highlands and Momase regions, potentially benefiting thousands of people.
Studies show that the vast majority (82 percent) of the PNG population is not connected to the electricity grid and struggle with access to power sources. A 2014 IFC study estimates that there are more than 1.3 million off-grid households not currently using solar power due largely to the high upfront costs of purchasing solar kits, indicating that the potential to expand the use of solar power units in the country through affordable repayment schemes is substantial.
The Pay-As-You-Go (PAYG) solar loan product is expected to benefit low-income off-grid households significantly, eliminating the cost burden of paying for expensive kerosene, which in 2014 took up almost 60 percent of household expenditure for off-grid households. At the same time as providing an affordable means to accessing electricity, the PAYG model provides a new channel that financial services providers can harness to reach underserved consumers. The MiCash mobile wallet, coupled with a financial literacy programme has the potential to quickly drive adoption and usage rates and help customers to benefit from other products and services such as micro credit, savings accounts and microinsurance, potentially improving household quality of life.
The Pacific Financial Inclusion Programme (PFIP) is providing MiBank a partnership grant of US$105,500 to enable this innovative new product.
MiBank Managing Director Tony Westaway remarked, “We are continually focused on providing tools to empower the lower income groups in society, and in particular women. The grant of $105,500 that PFIP has given MiBank has assisted us in upgrading our technology platform and in training agents in the various pilot locations. We believe the PAYG model will assist MiBank in extending its mobile money outreach to more people in more provinces and it’s a great way to deepen financial inclusion.”
— Tony Westaway (@twestaway) November 22, 2016
PFIP Manager, Mark Flaming, added, “We’re always happy to support organisations that are trying to push financial inclusion in new directions and to use new avenues to reach people. We see this project as a test of this payment platform and to see if there is sufficient demand for the financial products that are made available to customers who sign up for the solar units. It has the promise to be a highly scalable model and if so, it could be truly transformational”.
PFIP’s partnership and investment in MiBank is made possible through the funding support of the European Union as part of the PNG Rural Economic Development (RED2) project.
PFIP is a Pacific-wide programme helping low-income households gain access to financial services and financial education. It is jointly administered by the UN Capital Development Fund (UNCDF) and the United Nations Development Programme (UNDP) and receives funding from the Australian Government, the European Union and the New Zealand Government.
PFIP aims to add one million Pacific Islanders to the formal financial sector by 2019 by supporting policy and regulatory initiatives, funding innovation with financial services and delivery channels, disseminating market information, and empowering consumers.
PFIP operates from the UNDP Pacific Office in Suva, Fiji and has offices in Papua New Guinea, Samoa and Solomon Islands.
Nationwide Microbank Limited, trading as MiBank, was granted a banking license in 2006, and today is arguably the largest microfinance institution in the South Pacific. MiBank delivers modern and affordable, savings, loans and insurance products, from a network of 11 branches and many agents across Papua New Guinea. MiBank is at the forefront of innovation, being the first licensed financial institution to deploy a Mobile Wallet in the South Pacific, called MiCash, and the first institution to introduce a Microinsurance product in Papua New Guinea called MiLife. MiBank prides itself on diversity and women’s banking is a key focus area. The Bank empowers women and grassroots people generally through financial literacy training and access to its products and services.
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