Solomon Islands is providing an interesting case study and early testing ground for digital technology-driven financial inclusion in the Pacific. Photo: UNCDF Pacific.


The Solomon Islands’ Government has made digital transformation central to its financial inclusion agenda, with other Pacific countries following its progress closely. Notwithstanding the challenges due to the country’s status as a developing, isolated economy, this initiative holds much promise if the latest trends are anything to go by. Globally, digital technologies are a key component of inclusive eonomies and have provided a path for the financially excluded to enter the formal economy. The trend is also catching on in the Pacific, with Solomon Islands providing an interesting case study and early testing ground.

On April 23, Prime Minister Manasseh Sogavare launched the country’s first Inclusive Digital Economy Scorecard (IDES), alongside its five-year National Financial Inclusion Strategy (NFIS), in the capital, Honiara. The IDES is a policy tool developed by the UN Capital Development Fund (UNCDF) that governments can use to identify key market constraints and set priorities for developing an inclusive digital economy. The two strategic documents were launched together to symbolize the government’s aim of using digital technologies as a key driver of financial inclusion in the country. Solomon Islands was one of four countries in the world, and the first in the Pacific region, to embrace the IDES as a policy tool, alongside Burkina Faso, Nepal and Uganda, all of which are on the UN list of Least Developed Countries (LDCs).

With a digital economy score of 39 percent, stakeholders from the private and public sectors have assessed Solomon Islands to be firmly in the start-up phase with regards to the development of the digital economy. The scores are derived from data on policy and regulation (49%), infrastructure (33%), innovation (25%) and skills (49%).

While there is potential for digital technologies to transform business models, services and workplaces in Solomon Islands, significant challenges need to be addressed before the benefits are realised. The country’s economy is one of the most isolated and vulnerable in the world. GDP contracted by 4.9 percent in 2020, as the impact of the COVID-19 pandemic, including reduced demand for commodities such as logging exports and a virtual halt to tourism, bit into the country’s economy. As an LDC, set to graduate in 2024, there are also challenges with infrastructure and the digital and financial skills of the general population. Under IDES, Solomon Islands scored a low 33 percent on infrastructure, driven largely by scant internet usage (20%), low ownership of smartphones (33%) and weak digital payments infrastructure (19%). The 49 percent score for skills of citizens to access and use basic digital services is also an area that needs attention. The scores for basic skills (57%) and financial literacy (74%) are more encouraging, but the digital literacy score of just 17 percent shows an area that needs significant attention to improve. The compound effect of this is revealed in the low innovation score of 25 percent, reflected in the virtual non-existence of innovation hubs and/or co-working spaces.

Despite the challenges, there is evidence that digital technologies can be harnessed to improve the economic participation of Solomon Islanders by making financial services more accessible to marginalized communities. The Government has shown strong intent to develop a digital economy, as indicated by the focus on digital technologies in the country’s latest financial inclusion strategy. Solomon Islands received a score of 49 percent for policy and regulation under IDES, meaning that the ambition of the country’s regulatory bodies, such as the Central Bank, offers a solid foundation to build upon to develop an inclusive digital economy. The scorecard recommends, among other things, establishing a multi-stakeholder National Digital Economy Taskforce to specifically address the market challenges.

Another recommendation is for government to establish more public-private partnerships to boost innovation and create digital financial solutions in the country, citing the youSave LoMobile micro-pension product as a success story.


To be continued next week: Learn more about the YouSave LoMobile initiative and the benefits of fostering inclusive digital economies for Pacific Island Countries.

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