Achievement at a glance
PFIP has supported 10 service providers since 2009, which have cumulatively enrolled over 1 million customers in financial services (as of March 2016), surpassing its overall programme objective. In 2015, an additional 172,075 Pacific Islanders were reached with PFIP support, bringing the total number of people reached through PFIP 2 (2014-2018) to 263,859. PFIP 2 has just surpassed its mid-point target, and with continued growth of the current products plus the addition of others in 2016 and 2017, PFIP is well placed to reach the additional 500,000 Pacific Islanders by the end of the programme.
Challenges faced in implementation
PFIP is making significant strides in achieving programme targets, however, during the reporting period certain workplan activities were not achieved as expected, or conditions on the ground required PFIP to change course.
Major challenges included:
• PFIP lost its manager to a tragic accident in mid-2015. However, senior personnel filled the gap with effective leadership and management and the programme stayed on track against annual targets. A new Manager was recruited in beginning in February 2016 and brings a sharper focus on growing customer usage and value proposition through customer-centred design approaches.
• PFIP realized a significant (26%) reduction in programme budget due to realized foreign exchange rate losses in donor. This loss compounded the pre-existing funding gap from resources yet to be mobilized for the global programme budget. With current funding, PFIP will be able to finance the next phase of product innovation and customer acquisition initiatives, but will need additional funds to enable scaling up of successful initiatives.
• Workplan activities are dependent on the drive, momentum and capacity of in-country partners thus, in some cases implementation continues to move forward at a slower pace than expected.
The next generation effort is about creating services that mass market customers adopt and segmenting the market to design services that will work for vulnerable and marginalized populations. From the customer’s perspective, these next efforts will focus on the second and third steps in the customer journey towards using financial services to improve daily life. This is primarily a service design challenge and it requires a dedicated and structured approach to testing and prototyping options until they are validated by the customers. PFIP will assist providers in funding these dedicated design teams and in accessing international talent and partners.
It is equally important that these next generation initiatives develop services that have enough customer demand to be commercially scalable. Without that validation, it is unlikely the providers will continue to invest in a mass market strategy.
Low-income, financially underserved Pacific Islanders, particularly in PFIP’s primary countries of focus: Fiji, Solomon Islands, Papua New Guinea, Tonga, Vanuatu and Samoa.
Without access to basic financial services, people are unable to achieve their full economic potential and are denied opportunities to improve their standard of living. Since 2008, PFIP has worked to increase the number of Pacific Islanders who are able to access and use appropriate financial services to better manage their household finances. PFIP aims to provide Pacific Islanders with access to appropriate financial services such as access to credit, savings facilities, insurance and remittances they need to achieve their full economic potential.
Formal financial inclusion helps people:
• Safeguard savings, which can help households manage cash flow spikes and smooth consumption
• Finance small businesses or microenterprises,
• Plan and pay for recurring expenses, such as school fees;
• Mitigate shocks related to unexpected events such as medical emergencies, a death in the family, or natural disasters; and
• Improve their overall welfare.
At a national and regional level, research suggests that financial inclusion is linked with economic growth and employment, and a decrease in poverty.