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Solomon Islands: Strengthening Financial Inclusion

Sovereign (Public) Project | 46508-001 Status: Closed

The Government of Solomon Islands requested ADB for technical assistance to improve access to and suitability of financial services to promote economic opportunities in rural areas. The TA will (i) increase the availability of suitable financial services and lessen financing constraints for selected smallholder farmers and small rural businesses, (ii) promote financial literacy and capacity, and (iii) safeguard consumer interests in branchless banking. ADB approved a technical assistance in the amount of $600,000 with a $400,000 contribution from the Financial Sector Development Partnership Special Fund in September 2014.

Project Details

Project Officer
Hodge, Matthew W. Pacific Department Request for information
Country
  • Solomon Islands
Modality
  • Technical Assistance
Sector
  • Finance
 
Project Name Strengthening Financial Inclusion
Project Number 46508-001
Country Solomon Islands
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8723-SOL: Strengthening Financial Inclusion
Technical Assistance Special Fund US$ 200,000.00
Financial Sector Development Partnership Special Fund US$ 400,000.00
Technical Assistance Special Fund US$ 200,000.00
Financial Sector Development Partnership Special Fund US$ 400,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Agriculture, natural resources and rural development / Agro-industry, marketing, and trade

Finance / Central banking systems - Inclusive finance

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The Government of Solomon Islands requested ADB for technical assistance to improve access to and suitability of financial services to promote economic opportunities in rural areas. The TA will (i) increase the availability of suitable financial services and lessen financing constraints for selected smallholder farmers and small rural businesses, (ii) promote financial literacy and capacity, and (iii) safeguard consumer interests in branchless banking. ADB approved a technical assistance in the amount of $600,000 with a $400,000 contribution from the Financial Sector Development Partnership Special Fund in September 2014.
Project Rationale and Linkage to Country/Regional Strategy Solomon Islands comprises six large islands, dozens of smaller islands, and hundreds of islets and atolls. More than 80% of the 553,000 population live in widely dispersed villages of several hundred people, mostly on a subsistence level. Geographic dispersion and remoteness are major challenges that make service delivery costly. As a result, most rural dwellers lack access to health and education services, and markets. Transport services in rural areas and between outer islands are limited, and financial services are available only in urban and provincial centers.
Impact Smallholder farmers in two provinces actively participate in the cash economy.
Project Outcome
Description of Outcome Selected smallholder farmers in two provinces use financial services.
Progress Toward Outcome

This TA had three phases. Research results from phase one were used to inform phase two and phase three.

Phase one involved (i) development of knowledge products on financial capability and digital financial services, (ii) a review of the Central Bank of Solomon Islands' (CBSI) guarantee scheme, and (iii) a study on coconut value chain financing. Analysis of coconut value chain financing resulted in the recommendation that the farmers should be introduced to a mobile savings product and financial education before developing value chain financing products and linkages. This phase was completed in February 2016.

Phase two activities commenced in 2016. The first phase two activity was the development of branchless banking guidelines, which were approved by the Board of CBSI in June 2017. CBSI requested ADB to conduct training for CBSI staff on the guidelines. This request was endorsed and the training was conducted in September 2017.

The second phase two activity was the development and pilot of a digital savings product with incorporated financial education tools. To deliver this, ADB partnered with World Education Australia, Ltd. (Good Return). Good Return developed a business case to ensure sustainability of the product, and selected Pan Oceanic Bank as the implementing partner. The pilot of the digital savings product ran from June to December 2017 in Tatamba, Isabel Province. As of November 2017, a total of 88 community members had signed up for the savings product, of which 55% were women. Pan Oceanic Bank is expected to roll out the product to other areas of Solomon Islands in 2019.

In February 2018, ADB agreed to use surplus TA funds to extend into a third phase, partnering again with Good Return. The third phase was focused on (i) strengthening financial literacy in Solomon Islands by supporting CBSI to develop their own tailored financial literacy materials, and (ii) the development of an agent management framework to support the growth of the agent/branchless banking model.

As of March 2019, tailored financial literacy materials focusing on behavior and money mindfulness' have been developed in English and Pijin English. A pilot of the materials was conducted from October to December 2018 and involved training of 17 trainers through selected partner organisations, and reaching approximately 150 trainees. The materials have since been refined, and handed over to CBSI for continued implementation. The program also supported a six-week radio drama and outreach program on financial awareness through CBSI's regular segment Money Matters'.

Under the program, Good Return has also developed an agent management framework for financial institutions in Solomon Islands, supporting the expansion of branchless banking in Solomon Islands. This framework was piloted with one financial institution, and handed over to CBSI.

All TA activities have been completed, and reports delivered. They are currently under review by ADB.

Implementation Progress
Description of Project Outputs

Selected Smallholder farmers in two provinces have improved knowledge on financial issues,

Selected smallholder farmers, including coconut value chain stakeholders, are provided with adequate financial services

Consumer interests in branchless banking models are safeguarded.

Key requirements established for the adoption and sustainability of mobile financial services

Status of Implementation Progress (Outputs, Activities, and Issues)

A mobile savings product with an embedded financial education tool has been developed and piloted in a rural area of Solomon Islands. A new digital product has been launched in Isabel Province.

Analyses of coconut value chain financing has been completed, recommending that relevant farmers are introduced to the mobile savings product and financial education tools before developing value chain financing products and linkages.

Branchless banking guidelines were endorsed by CBSI in July 2017. Training for CBSI staff and commercial banks on guidelines was completed in September 2017.

An agent management framework has been developed and piloted with one financial institution. A tailored financial education program has been developed and piloted reaching 17 trainers and 150 trainees.

Geographical Location
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 team continues to consult with various stakeholders, including the Solomon Islands National Financial Inclusion Taskforce, CBSI, and Good Return Australia.
Business Opportunities
Consulting Services The TA will be implemented over 36 months from 30 October 2014 to 30 September 2017. It is anticipated that a total 10 person-months of intermittent international and national consulting services will be required for implementing of the TA''s phase one. Additional consulting services are estimated at 10 person-months, intermittent. This will be determined after phase one and findings and recommendations for implementation have been discussed and agreed with the stakeholders. The consultants will be recruited under the Guidelines on the Use of Consultants (2013, as amended from time to time).
Procurement All goods procured under the TA will follow ADB's Procurement Guidelines (2013, as amended from time to time).
Responsible ADB Officer Hodge, Matthew W.
Responsible ADB Department Pacific Department
Responsible ADB Division Pacific Liaison and Coordination Office in Sydney, Australia
Executing Agencies
Central Bank of Solomon Islands
P.O. Box 634,
Honiara, Solomon Islands
Timetable
Concept Clearance 03 Jul 2014
Fact Finding 13 Aug 2014 to 22 Aug 2014
MRM -
Approval 24 Sep 2014
Last Review Mission -
Last PDS Update 28 Mar 2019

TA 8723-SOL

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
24 Sep 2014 20 Oct 2014 20 Oct 2014 29 Oct 2017 28 Apr 2019 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,200,000.00 0.00 0.00 0.00 0.00 0.00 1,200,000.00 24 Sep 2014 580,510.48

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Related Publications

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Tenders

No tenders for this project were found.

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.