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Launch of Microfinance Project Brings Banking to PNG Rural Poor
EAST NEW BRITAIN PROVINCE, PAPUA NEW GUINEA – The Government of Papua New Guinea, the Asian Development Bank (ADB) and Australian Agency for International Development (AusAID) have launched a $24 million project to bring financial services and credit to rural communities in Papua New Guinea (PNG).
The Bank of PNG Governor Loi Bakani delivered the keynote speech at the launch of the Microfinance Expansion Project, and Charles Andrews, Country Director of ADB’s Papua New Guinea Resident Mission, also spoke.
”The demand for access to financial services in rural areas of PNG is real and growing,” said ADB’s Charles Andrews. “The Microfinance Expansion Project will build on the successes of our earlier support which included capitalizing and assisting Nationwide Microbank. The challenge is to continue expanding.”
The Microfinance Expansion Project is expected to generate jobs and boost growth in some of the country’s poorest and most isolated regions by strengthening industry regulation and bolstering the ability of financial institutions to deliver a wider range of financial services and products in rural areas, with a focus on lending to micro and small enterprises, and women, who struggle to access credit.
The project will also support a large-scale financial literacy training program that aims to reach more than 120,000 people living in rural areas, at least 40% of whom will be women. The training will allow potential clients to better determine what products they need and if they can afford them.
Lack of access to finance is a major constraint to rural development in PNG. ADB estimates that only 15% of the population has access to formal or informal banking facilities; this is even lower in rural areas.
The Microfinance Expansion Project is being co-financed by ADB, AusAID, and the Government of Papua New Guinea. The project is due for completion by the end of 2017.
It builds on the achievements of the Microfinance and Employment Project, which was implemented between 2002 and 2010 with a $9.6 million concessional loan from ADB to the Government of PNG and a grant from AusAID. It laid the foundation of a growing microfinance sector in PNG, through extensive training of staff and the development of appropriate products.