Financial Services Models in Papua New Guinea: Increasing Access to Finance in Rural Areas

This briefing note by Foundation for Development Cooperation examines the suitability of various business models for the provision of financial services in Papua New Guinea (PNG). Models discussed are traditional branch model, electronic banking services, mobile phone banking, rural banking through mobile branches, and community trust funds.

The note provides a list of considerations that would help to identify and implement the right business models to meet the needs for financial services in rural PNG. Conclusions include:

• Suitability of financial services in PNG must be determined according to criteria such as social inclusiveness, accessibility, affordability, and security for the user and provider;
• Combining different business models may generate more positive outcomes than relying on a single approach;
• Combining bottom-up and top-down approaches can lead to greater and longer lasting results;
• Sustainability over time is as important as maximizing outreach to rural communities;
• Technology and regulatory environment are changing and improving possibilities for the delivery of more inclusive financial services in rural and remote communities in PNG.