SINPF announces nationwide roll-out of micropension productJul 3, 2018
Honiara, Solomon Islands – Following the successful pilot project last year, the Solomon Islands National Provident Fund (SINPF) has announced a nationwide roll-out of their micropension account for Solomon Islanders active in the informal economy, who make up 80% of the population.
Officially launched by Deputy Prime Minister and Minister of Finance and Treasury, Hon. Manasseh Sogavare last Friday, the new youSave account gives all Solomon Islanders the opportunity to save voluntarily for their retirement.
Funded by the United Nation’s Pacific Financial Inclusion Programme (PFIP), the project aims to enroll 20,000 Solomon Islanders by the end of 2020 and will contribute to improved access to financial services, given that only 34% of the adult population of the Solomon Islands use any form of financial services.
The majority of the unbanked are women and rural dwellers, who SINPF field teams will reach and on-board through door-to-door visits. Sign up will also take place at all major centers like market places and retail stores, and focus on agriculture and tourism sectors. Once registered, Solomon Islanders will be able to easily make regular small pension payments through their mobile phone using ANZ’s goMoney platform. ANZ goMoney Merchants will also act as Agents to assist SINPF with collecting member contributions.
To ease the time-consuming and cumbersome manual sign up process, the SINPF will roll out an automated system, which will enable capturing of customer records and their biometric fingerprint using Android tablets connected to the internet. At the same time, the new SINPF members will instantly receive their membership card. This system will also provide a solution for many Solomon Islanders who lack the necessary formal identifications or IDs.
PFIP’s Financial Inclusion Specialist Isaac Holly said that currently the informal economy uses informal ways to save, like hiding money under a mattress, but these methods are unsecure and will not be enough for long-term needs.
“Through the youSave account, Solomon Islanders can make small contributions that will earn them investment returns and give them peace of mind that their money is secure.”
Background of the Project
In March 2017, through Australian Government funding, the Pacific Financial Inclusion Programme (PFIP) assisted the SINPF with the roll out of a prototype micropension product targeting the informal sector.
Using a small sign up booth once a week at the Honiara market and through radio awareness, the product proved very popular and it signed up many new members in a short period of time. This mode however would prove to be too expensive, so PFIP brought onboard ANZ Bank to develop a prototype to test client responses to mobile digital payment interfaces. Using ANZ goMoney, members were able to make small contributions conveniently from anywhere and saved time and money associated with manual payments.
The pilot project came to an end in December 2017 with demand and usage both validated. The project noted SBD $800,000 was banked by 1,200 registered members and over 300 transactions each month were done through four ANZs goMoney agents. These results were presented to the Board of SINPF, who approved its roll out nationwide.
This was PFIP’s first project employing an Innovation Lab (Learn, Test, Scale) model where the micropension product was researched and tested, prior to viability and demand successfully proven. PFIP is exploring opportunities to replicate this model in other Pacific Island Countries.
youSave is offered to Solomon Islanders between the ages of 16 – 51 who are self-employed. An individual can sign up and begin saving by registering with various forms of identification and a $50 deposit.
The product has two components. Every dollar deposited into the youSave account gets split between two accounts:
- Preserved Account – a retirement savings account that cannot be accessed until the account holder is 55.
- General Account – an account that can be accessed by the account holder for emergencies
Each time a deposit is made, the product will send the account holder a text message to update them on their account balance. The account has a maximum contribution of $100,000 a year.
PFIP is a Pacific-wide programme that has helped 1.9 million low-income Pacific islanders gain access to financial services and financial education. It achieves these results by funding innovation with financial services and delivery channels, supporting policy and regulatory initiatives, and empowering consumers.
PFIP operates from the UNDP Pacific Office in Suva, Fiji and has offices in Papua New Guinea, Samoa and Solomon Islands. It is jointly administered by the UN Capital Development Fund (UNCDF) and the United Nations Development Programme (UNDP) and receives funding from the Australian Government, the European Union and the New Zealand Government.Contact information