Papua New Guinea: Microfinance Expansion Project

Sovereign Project | 44304-013 Status: Active

Summary

ADB is helping rural communities in Papua New Guinea access financial services. The project will strengthen industry regulation and the capacity of lenders to deliver a wider range of financial services and products in rural areas, with a focus on lending to micro and small enterprises, and especially to women. The project will also support a large-scale financial literacy training program.

Latest Project Documents

Consulting Notices See also: CMS

No notices are currently available for this project.

Procurement Notices See also: Operational Procurement

No notices are currently available for this project.

Procurement Documents


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Project Name Microfinance Expansion Project
Project Number 44304-013
Country Papua New Guinea
Project Status Active
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant 0226-PNG: Microfinance Expansion Project
Government of Australia US$ 6.00 million
Loan 2686-PNG: Microfinance Expansion Project
Asian Development Fund US$ 13.00 million
Grant 0425-PNG: Microfinance Expansion Project (additional financing)
Government of Australia US$ 2.85 million
Strategic Agendas Inclusive economic growth
Drivers of Change Partnerships
Private sector development
Sector / Subsector

Finance - Finance sector development - Inclusive finance - Small and medium enterprise finance and leasing

Gender Equity and Mainstreaming Effective gender mainstreaming
Description
Project Rationale and Linkage to Country/Regional Strategy
Impact

Project Outcome

Description of Outcome
Progress Toward Outcome A request for a minor change in scope was approved to extend the project by one year and reallocation to finance extension of consultant contracts.
Implementation Progress
Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)

Despite some set-backs in the first couple of years (specifically the challenge of establishing reliable partnerships and recruiting quality staff), the project is now on track and continues to gain momentum. Strong progress has been made in the five specific outputs including (i) business and product management capacity of partner financial institutions (PIFs) is increased, (ii) clients and potential clients understand and know how to access financial services for personal or business use, (iii) Centre for Excellence in Financial Inclusion (CEFI) jointly monitors agreed microfinance industry standards, (iv) BPNG regulation and supervision of microfinance institutions (MFIs) and savings and loans societies (SLS) is streamlined and improved, and (v) a risk share facility supports increased micro and small enterprise lending.

Key milestones during 2015 include:

(i) Continued to work with ten microfinance institutions which have complete coverage of PNG, and supported the institutions to expand the outreach to 31,831 people (the number of new bank accounts), and expand lending by PGK26.8 million,

(ii) Financial education training has now been extended to 91,319 people of which 43,063 (47%) are women,

(iii) The first mobile banking agent (Mibank) was opened in Tsak valley,

(iv) CEFI has successfully coordinated the National Financial Inclusion and Financial Literacy Strategy 2014 2015, and is now in the process of designing the next phase,

(v) MEP facilitated partnership between Mi Bank and Reformation Ministries for Churches Network (RMCN) to establish a mobile banking agency in Tsak vally in Enga province,

(vi) 2,847 person days of staff training (for microfinance institutions) conducted, of which 1,405 days are for female staff (44%).

(vii) Commenced business development training and business counselling services targeting the micro and small business sector. Partner agreements were signed to reach 12,354 people during the next two years, and

(viii) Risk share facility commenced operations to support partner financial institutions to lend to micro and small business sector. Three risk share agreements have been signed that covers a lending portfolio of PGK2 million so far.

Geographical Location

Safeguard Categories

Environment FI
Involuntary Resettlement C
Indigenous Peoples B

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation The project partners with commercial banks, microbanks, NGOs, faith-based organizations and cooperatives to reach very remote parts of the country to facilitate financial education and link clients to the formal banking sector.

Business Opportunities

Consulting Services The lead implementation firm has been engaged. Various, smaller consulting packages for financial literacy and business development skills training, and others will be through QCBS/CQS/SSS/ICS method as suitable.
Procurement

All procurement of goods will be undertaken in accordance with ADB's Procurement Guidelines. Before the start of any procurement, ADB and the government will review the public procurement laws of the government to ensure consistency with ADB's Procurement Guidelines.

The PMU will be responsible for the procurement of all goods and related services, under the project. Shopping will be used for procuring readily available off-the-shelf goods and related services valued up to $100,000.

Responsible Staff

Responsible ADB Officer Hayden Everett
Responsible ADB Department Pacific Department
Responsible ADB Division Pacific Liaison and Coordination Office in Sydney, Australia
Executing Agencies
Bank of Papua New Guinea
Douglas St., P. O. Box 121
Port Moresby
Papua New Guinea

Timetable

Concept Clearance 05 Mar 2010
Fact Finding 25 May 2010 to 28 May 2010
MRM 19 Aug 2009
Approval -
Last Review Mission -
PDS Creation Date 05 Nov 2010
Last PDS Update 17 Mar 2016

Grant 0226-PNG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Oct 2010 25 Nov 2010 07 Mar 2011 30 Jun 2018 30 Jun 2019 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 11.05 Cumulative Contract Awards
ADB 0.00 28 Oct 2010 0.00 4.12 69%
Counterpart 5.05 Cumulative Disbursements
Cofinancing 6.00 28 Oct 2010 0.00 3.58 60%

Grant 0425-PNG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
09 Feb 2015 10 Jul 2015 10 Nov 2015 30 Jun 2018 30 Jun 2019 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 2.85 Cumulative Contract Awards
ADB 0.00 09 Feb 2015 0.00 0.71 25%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 2.85 09 Feb 2015 0.00 0.11 4%

Loan 2686-PNG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Oct 2010 25 Nov 2010 07 Mar 2011 30 Jun 2018 30 Jun 2019 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 13.00 Cumulative Contract Awards
ADB 13.00 28 Oct 2010 10.93 0.00 90%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 28 Oct 2010 10.00 0.00 82%

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

Title Document Type Document Date
Papua New Guinea: Microfinance Expansion Project Brochures and Flyers Apr 2016

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