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