Impact Stories from the Pacific Region Breaking Down the Barriers to Business More Private Sector Reform Stories Contents
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Impact Stories from the Pacific Region Breaking Down the Barriers to Business More Private Sector Reform Stories Contents 1 Foreword Banking the Unbanked 2 A widow and small-time coffee grower in remote Papua New Guinea province is one of thousands of customers benefiting from a successful microbank focused on the needs of the poor. Network Rollout Puts a Nation in Touch 6 After a long wait, telecommunications services are becoming available to even the remotest regions in Papua New Guinea, supported by a private-sector loan project. Adapting to Climate Change and Generating Incomes 12 Lashed by rain, Solomon Islands are rolling out “climate-proofed” transportation infrastructure that will facilitate local trade and provide long-term construction and maintenance employment. Loans In a Day 16 Sweeping business reforms assisted by ADB are making it easier to raise money and do business. Rebirth of a Marina 20 The sale and rehabilitation of Sasape Marina, formerly a state-owned enterprise, highlights some of the real benefits that can result from privatization. Loans You Can Bank On 26 ADB assistance has helped the Institute of Microfinance Timor-Leste (IMfTL) become the country’s first locally owned commercial bank to provide loans to individuals and small businesses in urban and rural areas. The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. Accounts presented here are anecdotal and do not represent comprehensive impacts of projects or programs. ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this publication, ADB does not intend to make any judgments as to the legal or other status of any territory or area. ADB encourages printing or copying information exclusively for personal and noncommercial use with proper acknowledgment of ADB. Users are restricted from reselling, redistributing, or creating derivative works for commercial purposes without the express, written consent of ADB. Note: In this publication, “$” refers to US dollars. PHOTO CREDITS: Cover: Kiosk owner Marquita dos Santos benefitted from ADB supported microfinance projects. Photo by Luis Ascui; Loans You Can Bank On-Photos by Luis Ascui; Network Rollout Puts a Nation in Touch-Photos of phone towers by Digicel, Peter Anjo and Lucy Bonai. Photo by Digicel; Banking the Unbanked in Papua New Guinea-Photos by Nationwide Microbank; All other photos by ADB. FOREWORD hrough the Pacific Private Sector Nationwide Microbank in Papua New Guinea Development Initiative (PSDI), ADB is (PNG) has established branches in rural areas. It T helping countries in the Pacific region now has 100,000 clients with a savings account. reform their business environments to make it With help from the PSDI, bank clients can now easier for the private sector to conduct business, access their accounts through their mobile grow, and create jobs. A vibrant private sector is phones. PSDI also helped Solomon Islands critical to sustained growth in the Pacific and can government sell Sasape Marina in Tulagi, which play an innovative role in overcoming obstacles saved the business and will create up to 150 jobs. to development. PSDI’s initiatives are demand- and need-structured, so the benefits of economic Many of these PSDI reforms have had a major growth are spread throughout the economies in impact on promoting the entry of women into the region. formal business. The second and current phase of PSDI has boosted women’s access to financial Established by ADB in 2006 with cofinancing services, by expanding the rural outreach of from the Australian government, PSDI is a existing microfinance institutions in PNG, Timor- knowledge hub with a team of technical experts Leste, and Vanuatu. PSDI continues to help that focuses on business law reform, access governments of the Pacific DMCs revise business to financial services, state-owned enterprise laws to enhance women’s business opportunities. reform, and public–private partnerships. Through their reform activities, the PSDI team, In addition to PSDI assistance in the Pacific, in partnership with the governments of Pacific ADB supported infrastructure projects in developing member countries (DMCs) and other the region which are rehabilitating roads development organizations, is lifting the barriers and bridges. These projects include labor- to business and are working toward helping the based maintenance components that are region become a less risky, more cost-effective providing employment and income-generating place to do business. opportunities for local communities. PSDI has many major achievements. It has This booklet features the stories of helped develop modern commercial laws in entrepreneurial Pacific women and men who seven Pacific countries. For example, in Solomon explain how their lives have been changed for Islands, PSDI assisted the government with the better through ADB-supported PSDI reforms drafting a new law that simplifies the legal and infrastructure assistance in the region. Foreword requirements for establishing and operating companies. Before the reform, forming a I would like to thank our Pacific government 1 company could take as long as 2 months. counterparts for their enthusiasm in helping lay the After the reform, a company may be created foundations for private sector–led growth in their in 1–2 days at the cost of no more than $100. countries. There is still much to do to help make In 2012, the World Bank’s Doing Business the Pacific a more business-friendly region, and Indicators Report listed Solomon Islands as governments of the Pacific DMCs and development being among the top 12 countries surveyed that partners are working tirelessly toward this end. demonstrated significant business law reform. The report, which measures the ease of doing We appreciate the Australian Agency for business, showed Solomon Islands ranked International Development’s (AusAID) strong 74 out of 183 economies, a huge improvement support of PSDI, and look forward to working from just 2 years ago when it ranked 106th. closely with Australia and other development This confirms Solomon Islands is becoming an partners to further extend and develop this easier place to conduct business. innovative, flexible, and rapid response initiative. Xianbin Yao Director General, Pacific Department Asian Development Bank PAPUA NEW GUINEA Banking the \ 2 Unbanked A widow and small-time coffee grower in remote Papua New Guinea province is one of thousands of customers benefiting from a successful microbank focused on the needs of the poor. t 100,000 customers and counting. Tommie Seriate, center, a 49-year-old widow and mother of four, receives her landmark account book from the staff of Nationwide Microbank in Goroka. Credit: Nationwide Microbank Banking the Unbanked in Papua New Guinea Banking the Unbanked in Papua 3 Port Moresby, Papua New Guinea—It took almost “The message was loud and clear. It was simple for half a century for Tommie Seriate to open her first people at village level to open a savings account bank account. Prior to walking into a branch of with Nationwide,” she said. Nationwide Microbank in May 2011, this 49-year- old subsistence farmer from the rural Eastern Stories like Ms. Seriate’s are becoming increasingly Highlands Province of Papua New Guinea kept her common in rural Papua New Guinea. In opening earnings buried in the ashes of the fireplace where her bank account she became Nationwide’s she cooked food for her family. Saving proved 100,000th customer, a number that speaks to the difficult. A widow with four children and eight success of a project that began in 2002 to expand grandchildren, Ms. Seriate was often tempted to access to financial services in rural communities dig up the hearth to meet family needs. Then one and is now helping to generate jobs and boost day she heard a presentation given by Nationwide economic growth in some of the country’s poorest Microbank representatives in the local market. and most isolated regions. Ms. Seriate had tried in the past to open bank accounts with other commercial banks but found Nationwide Microbank (formerly Wau Microbank) their account opening process too difficult. But was established as part of the Microfinance and what she heard that day in the marketplace Employment Project, which ran for 8 years from encouraged her to try again. 2002 to 2010. The project—which was supported t Nationwide Microbank MiCash Agent operating a desk phone t Nationwide Microbank staff opening accounts at Boera Village “The message was loud and clear. It was simple for people at village level to open a savings account with Nationwide.” – Tommie Seriate, subsistence farmer and 100,000th customer of Nationwide Microbank with a $9.6 million ADB concessional loan to that would not have been possible without \ the Government of Papua New Guinea and a the ongoing support from ADB and the Pacific $909,000 grant from the Australian Agency for Financial Inclusion Programme (PFIP).” PFIP is a 4 International Development (AusAID)—helped multi-donor facility whose mission is to increase lay the foundations for the microfinance sector in the number of Pacific islanders who have on- Papua New Guinea through extensive training of going access to quality and affordable financial staff and the development of financial products services and financial education. tailored to a rural clientele. In 2004, the project provided capital and technical advice for a Lack of access to finance is a major constraint to pilot microbanking program, Wau Microbank, rural development in Papua New Guinea. ADB which quickly expanded to the towns of Bulolo, estimates that only about 15% of the population Kainantu, Lae, Madang, and Wewak.