Port Moresby, Papua New Guinea, February
11, 2019: The Bank of Papua New Guinea (BPNG) with support from
IFC, the International Finance Corporation, a member of the World
Bank Group, has been begun consultations on the fair and equitable treatment
of consumers who take out loans and other financial services.
The move follows a review by BPNG and IFC into financial services available
to people in Papua New Guinea (PNG) including financial consumer protection
laws, financial service institutions and practices in PNG. The review found
there were a range of issues with financial products including a lack of
transparency of information on rates, fees, terms and conditions, with
significant gaps in financial consumer protection as compared to international
best practices and recommended the development of a financial consumer
protection regulatory framework for PNG.
“The aim is to ensure consumers are not only treated fairly, but also
that loans and other products are transparent, promoted responsibly, and
that data is protected as well as to provide a means for consumers to have
a mechanism to seek recourse,” said Governor Loi Bakani CMG from BPNG.
“We need Papua New Guineans to have access to reputable and affordable
credit, so they can borrow money to create opportunity and jobs. The aim
is to not only help the consumers, but also build trust and competition
in the formal financial sector, to help us achieve our financial inclusion
goals,” he said.
The work supports one of the key pillars of the government of PNG’s recently
launched Financial Sector Development Strategy and the National Financial
Inclusion Policy. A series of regulations have now been drafted for
public consultation on establishing the framework for the fair and equitable
treatment of consumers of financial products and services. Consultative
meetings were held in Kokopo, Lae and Port Moresby.
It’s estimated only about 37 percent of adults in PNG have an account
with a formal financial institution. The numbers are even lower among low
income earners with only an estimated 15 percent of people with an account.
“The review highlights the opportunities for consumer to have access to
more affordable credit, and better understand the costs of borrowing. The
end result will improve trust in the system and help promote financial
inclusion,” says IFC’s Resident Representative in PNG, John Vivian.
A draft Financial Consumer Protection Regulation is available for consultation
and comments here.
The full review into financial consumer protection laws, institutions and
practices is available here.
About the PNG Partnership
IFC’s work in Papua New Guinea is guided by the PNG Partnership. Australia,
New Zealand and IFC are working together through the Partnership to stimulate
private sector investment and reduce poverty in Papua New Guinea.
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work with more than 2,000 businesses worldwide,
using our capital, expertise, and influence to create markets and opportunities
in the toughest areas of the world. In fiscal year 2018, we delivered more
than $23 billion in long-term financing for developing countries, leveraging
the power of the private sector to end extreme poverty and boost shared
prosperity. For more information, visit www.ifc.org.
BPNG aims to serve the people of Papua New Guinea by conducting effective
monetary policy and maintaining a sound financial system. BPNG acts at
all times to promote macro-economic stability, provide a first-class payments
system, issue the national currency and help foster economic growth of