In Papua New Guinea, Mobile Banking Brings Savings and Safety to Farmers
Papua New Guinea
For farmers in Papua New Guinea’s province of East New Britain, harvest time can be days of plenitude – and peril. Farmers deliver hessian bags brimming with cocoa or copra (dried coconut meat which is processed for oil) to the local commodity buyer’s warehouse, where the products are weighed and paid for in cash or check. But with no banks in these rural areas, farmers have to travel far on dusty, unpaved roads to cash checks or deposit cash in town.
That makes them targets for robbers.
“Some people have been held up on vehicles coming back from town because of they were carrying large sums of money,” says farmer Peter Wollcot.
But that risk has gone down. Farmers can now get paid electronically – through their mobile phones. It’s cheaper and faster. The mobile banking service, pioneered by Bank South Pacific’s subsidiary, BSP Rural, allows buyers to transfer payments to growers’ bank accounts via text messages on their mobile phones. Funds can be withdrawn using a bank card at electronic funds transfer machines, at ATMs, bank branches, or at local shops that operate as agents for the bank. A network of more than a dozen agents offers the service in rural areas close to where the cocoa and coconut growers live and work.
This means farmers save time and money. They can now focus to tending their land, potentially raising productivity, rather than worry about transporting money.
Farmer and business owner, Augustine Buava, uses mobile banking every day.
“It saves my time going down to Kokopo town, where I spend half a day or the whole day just standing in the queue. Mobile banking is easier for me. I use the service every day,” he says.
More than 3,000 farmers have now opened accounts.
“Now they are able to save time and convert their time back into working in the fields,” says Kili Tambua, Head of BSP Rural Banking. “They are able to save the money they have been spending on banking costs and other related costs. It has greatly benefited the local community.”
Agents receive commission and benefit from extra business revenues from mobile banking customers.
Encouraging a Saving Culture BSP launched the mobile banking service in late 2011. IFC, in partnership with the Australian government, backed the innovative pilot by providing technical advice and a performance-based grant.
Not only has it made payments faster and secure, it has also stimulated a saving culture among farmers. Single mother of six and cocoa grower for 20 years, Margaret Kowono, says mobile banking has helped her manage her money better. Before, with cash in hand, it was easy to spend her earnings or share it with her family. Now, she plans to use her savings to start poultry and piggery businesses.
Commodity buyer Otto Kuemba says farmers are eager to save money through mobile banking and are using their savings to reinvest in their businesses.
“It’s like a drive for farmers. Now they’re competitive trying to save their money, challenging each other over who’s going to save more,” says Kuemba.
Meanwhile, BSP Rural is planning new ways to reach more customers in rural areas, including using tablet computers to open new accounts and increasing marketing.
“IFC’s support and resources – providing experts to help us pilot this mobile banking – played a key role in all of this. Our part is to promote more awareness – going out to people and telling them the benefits,” says BSP’s Tambua.
With only a fifth of all Papua New Guineans having access to banking services, mobile banking will set to go a long way to growing the local economy and giving people in rural areas an opportunity to improve their livelihood and provide for their families.