Rural Papua New Guineans notch up K8 million transactions
BSP Rural Ltd staff Ossie Bale uses a tablet to open new bank accounts for women vendors in East New Britain.
The value of transactions by rural-based Bank South Pacific (BSP) customers in Papua New Guinea has reached K8 million (A$3.4 million).
Speaking in Kokopo, East New Britain province last Friday to mark the successful conclusion of BSP Rural Ltd's mobile banking pilot project, the head of the BSP subsidiary Kili Tambua said transactions using the BSP Rural Ltd network increased from K1.3 million in May last year to K8 million in May this year, confirming the level of interest in rural PNG.
“Since its establishment not too long ago, about not more than two years from now, we have had great interests from those established. Customers are starting to come in, showing a lot of interests, they are starting to register and open accounts and are getting involved in the activities that we run. When we started the transactions were a little bit slow then it picked up very quickly and keeps rising,” he said.
The BSP subsidiary’s mobile banking pilot project is based on enhanced cash-in and cash-out (CICO) features of SMS Bankin and is being marketed as a solution for large commodity buying companies as it can disburse payments directly to commodity growers.
The services offered by BSP Rural Ltd, according to Mr Tambua, will reduce cash and cheque handling, increase electronic auditing capability and oversight, and improve security overall. The growers will also benefit from improved security of the earnings via conventional banking services. The two other components of the pilot project are the development of the cash agent network and a widely distributed ecosystem of EFTPoS merchants in a given area.
The introduction of hand-held tablets by BSP Rural Ltd to open bank accounts for new rural-based customers is also leading the charge in getting more Papua New Guineans to sign up to the new service. With close to 85 per cent of PNG’s 7 million people living in rural enclaves, the ability of bank officers to register them in their communities is appealing to Papua New Guineans who have suffered from deteriorating and lacking basic services including banking.
The BSP subsidiary has 350 Samsung Galaxy tablets armed with a wireless card swipe, which can enable the operator to create and open bank accounts anywhere in PNG (which has a Digicel signal) within 5 minutes and issue a working debit card that can be used immediately.
East New Britain’s cocoa and copra growers are reaping the benefits of being pioneer users of this mobile banking solution as they will no longer have to travel long distances to cash a cheque. Buyers, similarly, will not have to raise cheques or take the risk of holding huge amounts of cash.
East New Britain farmers are already benefiting from community-focused banking services offered by BSP Rural Ltd.
The pilot project, which began late last year, has proven to be a success with many locals signing up to the service. The service allows buyers to transfer payments to growers’ bank accounts via their mobile phones. Funds can then be withdrawn using a Kundu Card at eftPOS machines, ATMs, bank branches, or at local shops that operate as agents for the bank. A network of more than a dozen agents offer the service in rural areas within the vicinity of East New Britain’s cocoa and coconut growers.
"I used to get paid by cheque and then travel far to cash it and this new service puts money into my bank account instantly and I can use my BSP Kundu Card to do my shopping and get cash at so many places near where I live,” said Anton Marakan, a cocoa grower from Kokopo district.
“The burden of rural people having to travel long distances for banking services will soon improve, thanks to the intervention by BSP to connect to rural households and rural businesses far from the nearest BSP branch. BSP is doing this because we mean business when we talk about financial inclusion for Papua New Guineans and we are now taking this service to all other centres throughout the country,” said Mr Tambua.
BSP Rural Ltd currently has 15 branches and plans to have 40 by the year end. The BSP subsidiary also has 15 payment processors and is signing up a number of sales teams with plans to recruit 250 agents, which would enable more people to access basic banking services.
BSP is delivering the service in East New Britain in close collaboration with NGIP-Agmark, the East New Britain Development Corporation (ENBDC), smallholder cocoa and copra producers and the International Finance Corporation (IFC).
“This significant project will enable BSP Rural to improve payment services to people living in rural communities. By providing quick and safe ways for business owners to send and receive money, this initiative is helping to grow the local economy and provide opportunity for people in rural areas,” said Mr Tambua.
The engagement of firms such as the ENBDC and NGIP-Agmark would also enable the bank to build new relationships with rural communities, consequently promoting access to basic financial services and secure savings.
ENBDC and NGIP-Agmark said the service was long overdue, would eliminate the need for the issuance of cheques and ensures greater security for them and their growers.
Besides the financial and security benefits, the service has also compelled farmers to embrace a saving culture.
Single mother of six and cocoa grower for 20 years, Margaret Kowono, says she did not save her earnings until the introduction of mobile banking. She now plans to use her savings to start a poultry and piggery business.
Commodity buyer Otto Kuemba says farmers are eager to save money through mobile banking and are using their savings to reinvest in their businesses.
“It’s like a drive for farmers. Now they’re competitive trying to save their money, challenging each other over who’s going to save more,” he said.