Papua New Guinea
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80pc of PNG citizens still remain unbanked

BY MAXINE KAMUS

Papua New Guinea still has about 80 per cent of its population unbanked and under banked and have no access to banking services.

BPNG assistant governor and manager of Financial Systems Stability Group George Awap recently said PNG has a very small financial sector with only four (4) commercial banks and 80 per cent of its population still has no access to banking services.

He said there are countries much smaller than PNG that have more banks, so when we have few financial institutions in the country that only means that a lot of our people are still in the rural areas with 80 per cent of them having no access to banks and financial services.

“This people can access banks, but due to logistics, especially transportation cost is very high to get to the bank. A simple farmer can earn a K100 from selling his or her cash crops but half of it may be used along the way to the bank. For instance, the farmer received K100, K20 or K30 from that K100 will go to transportation cost and by the time he or she reaches the bank the customer might have lost more of his hard earn money.

“At the bank that same customer might be treated like a stranger, might be refused to open a bank account or fees and requirements might be difficult to meet.

All this trouble will make the customer give up searching for financial institutions and in the process it allows him or her to be financially excluded because he has given up hope of searching for a financial institution,” Mr Awap said.

He added that to address these issues institutions needs to be created to support these people who are financial excluded.