FINANCIAL DIARIES ? PRESENTATION OF PRELIMINARY FINDINGS

CAPTION:?Group photo of attendants at the launch.

The launch of the interim results of the Financial Diaries project in Papua New Guinea on 4 July 2013 highlighted that low income households travel long distances to urban centers to carry out formal financial transactions and seldom use agents closer to their place of stay.

Formal financial transactions were usually driven by external factors such as palm oil buyers and employers who paid wages through direct bank deposits. These transactions on an average were usually large, around PGK 400 and once in three weeks households face a lump sum expenditure of PGK 100 which is financed through cash flows. Low income households in PNG heavily depend on their social networks to finance emergency expenditures like funerals which account to PGK 200 every four months.

In his opening remarks Bank of PNG Governor Loi Bakani said the access and usage of financial services would only improve if information gaps with reference to the key financial needs of the target population are plugged which could be achieved through the financial diaries project.

?There are two main expected outcomes of the financial diaries methodology. The first one is that it enables practitioners to link consumer financial behavior to product development. The second one is that it enables policy makers to take relevant steps to help frame appropriate market conduct and consumer protection norms,? Mr. Bakani said.

UNDP Resident Representative in PNG, Mr. David Mclachlan-Karr said results collected from this project would have far reaching impact on financial inclusion in the country. Mr Mclachlan-Karr said, ?Over the last 22 weeks, PFIP together with BPNG project team and technical assistance from Microfinance Opportunities have collected a comprehensive collection of temporal, spatial and network data, which would enable financial service providers to gain a deep understanding of the ways in which consumers use money, interact with financial service providers and transact within their social networks?.

Discussion during the launch centered around five key areas:

*How can long term savings (superannuation) be extended to wage workers, e.g. Palm oil plantation and coffee beans sales?

*Need to understand the rationale for low income clients? behavior for travelling long distances to cash out and spend their wage income when there is an established network of agents close by.

*What is the role of insurance in enabling households to better manage lump sum and unexpected expenditures (during funerals and other emergencies)?

*How can mobile network operators intermediate very small transactions and/or loans?

*What are the respective roles for the government and private sector in developing the financial infrastructure in PNG?

The project team also informed the stakeholders that these findings were based only on the initial set of data collected and the complete dataset would form the basis for identifying customer profiles. Based on the profiles, a series of in-depth interviews will be carried out across the three sites to further understand the behavior of low income households. The final findings will be shared through a series of workshops in November that will target both financial service providers and policymakers separately and assist them to use the data for decision making.

The Financial Diaries project is a joint undertaking by the Bank of Papua New Guinea and the Pacific Financial Inclusion Programme?withtechnical assistance from Microfinance Opportunities.?It is an innovative project and the first in the pacific supported with funding from Australian Agency for International Development.

The Pacific Financial Inclusion Programme (PFIP) is a joint programme of the United Nations Capital Development Fund (UNCDF) and United Nations Development Programme (UNDP) with additional funding support from the Australian Agency for International Development (AusAID) and the European Union/Africa, Caribbean and Pacific Microfinance Framework Programme (EU/ACP).