In Papua New Guinea (PNG), the majority of the population live in rural areas and rely heavily on agriculture as a livelihood. These rural farmers are often located great distances from towns and infrastructure, including banking services. As such 75% of the population is unbanked, of which 90% are women.
Most of the buyers and exporters of cash crops bank with large, commercial banks such as Bank South Pacific and ANZ. With a small income and complicated sign up process, farmers are often not able to open accounts and access financial services with the major branches based in most PNG towns. This means that both suppliers and buyers have to spend a great deal of time and money travelling from rural areas to access banking services, they are missing out on opportunities and there can be long delays with receiving payments. Not only does this make it more costly and time consuming but it also puts farmers, particularly those that are women, at great risk of being targeted for theft when they are travelling with a surplus of cash and makes it extremely difficult to save for large expenses like building houses or paying for school fees.
The Nationwide Microbank Limited (MiBank) is a PNG wide micro-bank that connects rural based suppliers of cocoa, copra, coffee and other cash crops with a banking system called ‘MiPei’. MiPei allows buyers to deposit funds directly into their account in real-time and suppliers to withdraw at designated agents in local communities using their mobile phones or bankcard. The partnership focuses on encouraging buyers, processors and exporters of cash crops in the country to use the payment system, and empowers people (particularly women) with better access to financial products in remote areas where banking options are limited. MiPei increases efficiency and provides suppliers and growers with better access to cash and other MiBank financial products, such as saving, loans and insurance.
The MiBank products are tailored to rural farmers and offer a simple sign up process and accounts with no monthly fees, no deposit fees and minimal withdrawal fees compared to commercial banks. MiBank has grown its presence in the rural communities with a network of 11 branches and around 80 active agents operating across PNG. With MiBank’s agents servicing rural communities who currently have no banking services, encouraging the large rural based suppliers to use the MiPei system allows farmers to access financial services without travelling to far off urban centres. This reduces travel costs, saves time, speeds up access to payments, reduces the risks involved with carrying cash while travelling and the likelihood of funds being misspent and allows families to save for the future. The MiPei system also provides buyers with an efficient, safe and convenient method of payment.
MDF’s partnership is assisting MiBank identify businesses that have a large rural supplier base willing to utilise the MiPei system and assist them with the conversion to MiPei. They are meeting directly with major cash crop buyers to showcase the product and the mutual benefits for both buyers and farmers. Research will be conducted into the current transaction costs that businesses incur in disbursing funds and the risks involved to help MiBank develop new products to meet the tailored needs of their potential clients. This partnership falls under the ICT and Logistics engagement area.
Facebook: MiBank PNG