ANZ Rural Banking and Microfinance in Fiji; Lessons From Experience

Presentation Outline• ANZ’s Corporate Responsibility framework• Background of the Rural Banking & Microfinance services• Representation in Fiji• Impact of Rural Banking Services in Fiji• Learning's from the Fiji experience• Issues & Challenges• Where to from here2

ANZ’s Corporate Responsibility (CR)frameworkANZ CR FrameworkRural Banking Fiji3

Background of the ANZ Rural Banking initiative• Launched in October 2004: 350k – 400k people with no accessto banking in Fiji• UNDP & ANZ competency based partnership with UNDPproviding a financial literacy program until 2005• A mobile banking service with 6 mobile banking units based in6 of our 16 Branch network• Face to face relationship with over 300 communities and 200schools each month• Financial inclusion through basic financial literacy and basicbanking services4

ANZ’s representation in FijiMacuata10,895Cakaudrove12,541Ba/Tavua13,454Tailevu/Naitsiri14,680Nadroga/Navosa10,593Serua/Namosi/Kadavu11,4225

Impact of Rural Banking services in Fiji• Increase in Financial Capability for rural communities- Savings & Payment agent – eg Remittances & Social Welfare- 73,000 Deposit accounts with a deposit base of FJD11m- 90% of our accounts are opened by people without any existing Bank a/c• Rural communities have access to banking and credit- Simple & affordable savings products conveniently accessible to ruralcommunities- Financial literacy promoted both at rural schools and communities• Improvement of livelihood- People with access to banking services and financial education are more likelyto have a cash surplus to re-invest in their farm or business- Positive relationship between a household’s wellbeing and its ability tomanage spending and re-invest the surplus.- Average deposit growth from $3.97 in 2006 to $157.89 in 20106

Rural Banking Operations7

Learning's from the Fiji experience• Initial experience with Micro-loan- Loans granted to first time borrowers with no lending & savingshistory/background - Financial Literacy has a positive impact- Support services is crucial• Limitations of current model- Limited Distribution channels – Mobile money, phone banking &EFTPOS can provide engines for regeneration- Operating within a commercial bank structure is too costly andtoo bureaucratic - Potential to review for a more efficient model8

Learning's from the Fiji experience• Senior management level commitment to rural banking& microfinance- Inbuilt in our CSR framework- Independent operations with separate policies, procedures andmethodologies with internal support systems• Operations model designed to fit local context- Passionate Bankers with a good understanding of the communitythey serve – multi vernacular/understand local cultures• Strong partnership with Govt, NGO’s & Corporate- National Financial Inclusion Taskforce (RBF)- Mobile phone technology9

Issues & Challenges• High operational Costs• Roads & Infrastructure• Security Issues• Balancing communityservice & sustainabilityover the long term• Partnership for supportservices10

Where to from here• ANZ is looking at options on how we continue RuralBanking & Microfinance• Fiji has the trained and talented resources- Geographically better placed to serve the region- Access to technology/communication partners• We’re committed to investing further in this area11

Thank You