Daulo, Papua New Guinea, February 8,
2011—IFC, a member of the World Bank Group, today signed
an agreement with BSP Rural to help
use electronic technology to provide small entrepreneurs in remote parts
of Papua New Guinea with banking services vital for business.
IFC is committing $770,500 to the project
under the Pacific Microfinance Initiative, a partnership with the Australian
government. The performance-based grant is an incentive for BSP Rural,
a subsidiary of Bank of South Pacific, to connect to subsistence households
and rural businesses far from the nearest branch.
The project, for the first time, will
provide banking services to customers in Papua New Guinea’s rural areas
by setting up electronic fund-transfer services in local shops or post
offices acting as agents for BSP Rural. This will enable people to obtain
a debit and savings card and to do basic banking transactions while shopping.
“Access to banking services is critical
for poor households and smaller rural enterprises to boost productivity,
create jobs, and reduce poverty,” said Lars Thunell, IFC Executive Vice
President and CEO. “In Papua New Guinea, more than 90 percent of
adults lack such access, which denies them opportunities to improve their
lives. IFC is supporting BSP Rural to help extend the reach of financial
services to rural areas.”
Affordable and reliable banking services
also are important for improving living standards in Papua New Guinea.
Farmers, small-scale producers, and rural women will benefit as the project
provides a safe and secure way to save and transfer money.
“This project will make significant
inroads in terms of allowing people in remote areas to send and receive
money quickly and more efficiently,” said Paul Thornton, Head of BSP Rural
Banking. “With IFC’s support, we aim to acquire 200,000 new customers
over the next three years and establish another 20 branches.”
Under the grant agreement, IFC will
assist BSP Rural in technology development, product distribution, customer
literacy programs, and call-center management. Grant disbursement will
be contingent on meeting agreed performance targets.
Improving access to finance is a priority
for IFC in the Pacific region. Last year, IFC and IFC Capitalization Fund
invested $140 million in Port Moresby-based Bank of South Pacific that
is helping expand financial services in Papua New Guinea and bolster the
bank’s presence across the Pacific region. The Pacific Microfinance Initiative
aims to improve the ability of microfinance and other financial-service
providers to deliver banking services to Pacific Island communities with
limited or no access.
IFC, a member of the World Bank Group, is the largest development institution
focused on the private sector in developing countries. We create opportunity
for people to escape poverty and improve their lives. We do so by providing
financing to help businesses employ more people and provide essential services,
mobilizing capital from others, and delivering advisory and risk-management
services to ensure sustainable development. In a time of global economic
uncertainty, our new investments climbed to a record $18 billion in fiscal
2010. For more information, visit www.ifc.org.