Takeaways from Fiji’s demand-side survey report on financial inclusion

Governor Barry Whiteside

Reserve Bank of Fiji (RBF) Governor Barry Whiteside speaks at a financial inclusion exposition in August 2014 .

Fiji conducted a demand-side survey in order to provide the National Financial Inclusion Taskforce, Reserve Bank of Fiji and other national stakeholders with a set of independent data to assess financial inclusion levels in Fiji.

Financial inclusion has become a priority and an integral part of the development agenda of many developing countries. Financial inclusion is about providing access to the many people that do not currently have access to basic formal financial services such as bank accounts. It is estimated that two billion of the world’s population have been reported to be unbanked. An inclusive financial sector therefore empowers individuals, especially the poor, to contribute to economic development and poverty alleviation, which must be one of our ultimate goals.

There has been a shift by policymakers from supporting the microfinance sector to a broader approach of inclusive finance that recognizes and encourages different types of financial service providers, working to serve the disadvantaged in our countries by collaborating with various stakeholders. What we have seen over the past decade is that we can learn from each other’s experiences, but each country needs to tailor their programs and initiatives to suit their own unique situations. The environment in which we operate is constantly evolving and we need to embrace the innovations in technology to facilitate affordable, accessible and appropriate financial products and services to all our citizens.

Central banks, in smaller developing economies such as ours, have traditionally focused on the two core policy objectives of price stability and a sufficient level of foreign reserves (external stability). However, in the recent past, more central banks have taken lead roles in advocating financial inclusion initiatives in their respective countries, building toward an inclusive financial system where access to financial services is available to all. It is not hard to see that if we are able to provide our people with the ability or hand up (through inclusiveness) to lift themselves out of poverty then the whole country will benefit.

Why does this demand-side survey matter?

It provides the National Financial Inclusion Taskforce (NFIT), Reserve Bank of Fiji (RBF) and our national stakeholders with a set of independent data to assess the levels of financial inclusion in Fiji.

It is very helpful for decision makers to better understand the situation or reality on the ground, particularly in understanding the barriers that are preventing people from using the formal financial system.

The demand-side survey provides us with an overall view of the access and usage among Fiji’s adults and, to some extent, the quality of financial services and products, both formal and informal. It also helps us to benchmark or measure our financial inclusion efforts against other countries around the world.

There is a lot of interest, notably from the international community, on the financial inclusion work in Fiji because, in part, we have developed a successful model that has been achieved through the partnership, collaboration and support of the private and public sector, civil society, donors and development partners.

Fiji Infographic

Click infographic to view full version

What are the key findings from the survey?

Banked and Excluded: The good news is 60 percent of adults in Fiji have an account with a formal financial institution, compared with comparable lower-middle income countries surveyed as part of the Global Findex. However the survey also highlights that nearly one third or 27 percent of adults are completely excluded from any type of financial service.

Furthermore, the inclusion is lower: in the Eastern and Western provinces of Fiji; among women; amongst iTaukei (indigenous) adults; among young adults (aged between 15-20 years); and among agricultural and casual workers.

Savings: The report highlights that a large proportion of adults saved during the previous year (71 percent), compared with 28 percent and 35 percent of adults in lower middle and upper middle-income countries in the Global Findex Survey. These levels are high across income quintiles as well, and even among banked agricultural and casual workers, nearly half (49 percent and 47 percent) opened bank accounts to save. Additionally, 27 percent of the respondents have retirement savings; these were found more with the urban dwellers.

Click infographic to view full version

Click infographic to view full version

Credit: The use of credit (both formal and informal) in Fiji is much lower than usage in comparable Global Findex Countries. The report highlights that the main sources of credit appear to be from informal sources like shop credit, hire purchase, family and friends and from banks.

Mobile money: There remains a low level of mobile money usage despite high levels of awareness, and only 6.5 percent of adults surveyed have a mobile money account.

Remittances: Approximately a quarter of the adults surveyed received money from acquaintances that live in Fiji or abroad, with a third of urban females receiving remittances in the past year. The sources of remittances show that 59 percent come from abroad and 38 percent are local with most of the local remittances being received via the post office.

Fiji Infographic Mobile Money

Click infographic to view full version

Insurance: Overall insurance ownership in Fiji is low at 12 percent of the population. These are higher among the employed (27 percent) than unemployed (7 percent). The reasons that those interviewed did not own insurance is mainly because they did not think they need insurance.

Moving forward

Overall the demand-side survey report presents some interesting findings on the overall access, usage and quality of financial services and products in Fiji, and can be used by the RBF to propose new policies to improve critical areas that are highlighted as low performing in the survey.

Based on this report, barriers to access and usage can be improved by directing more focus on the underserved people (gender/ethnicity) and geographical area (division/rural) through a collaborative approach with NFIT working closely with the government and other stakeholders.

While there have been some achievements in the past few years, we believe that much more remains to be done to promote and facilitate financial inclusion in Fiji. Financial inclusion clearly dovetails well with government’s goals of poverty alleviation and lifting of living standards of our Fijian people.

We will have another look at the report again when NFIT meets in July, where we will discuss the findings and propose strategies. Additionally, a national workshop will be convened in August to invite stakeholders to participate in reviewing the findings and the achievements of the past five years and agree upon a new financial inclusion strategy for Fiji for the next five years.

Barry Whiteside is the Governor at the Reserve Bank of Fiji, a member institution of the Alliance for Financial Inclusion.

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