Improving access to finance for farmers in Papua New Guinea

The International Fund for Agricultural Development (IFAD) finances the governmental “Market for Village Farmers Project”, which shall generate access to finance and supports village households during the transition from semisubsistence farming to farming as a business and a market-oriented production.

With more than 1,000 ethical cultures, Papua New Guinea is one of the most diverse countries in the world and the largest economy in the Pacific region. Poor infrastructure, cultural barriers and a high level of illiteracy comprise the key challenges to achieving financial inclusion. Around 80% of the population remains unbanked.

Agriculture – widely termed as the backbone of the country – is yet underdeveloped and not sufficiently funded. Most farmers do not have basic bank accounts. In addition, the country’s licenced financial institutions do not provide credit lines neither for cultivating ground crops nor for agriculturebased small and medium enterprises. Farmers face high bank requirements marginalising access to credit.

The project will support and improve both the supply and demand side of basic affordable financial services for farm households and other actors in the value chain consisting of bank accounts, credits, remittances and/ or insurances.

AFC has a long-standing work experience in Papua New Guinea. From 2016 to 2018, we worked on the Asian Development Bank-funded Risk Sharing Facility project, which provided guarantees for financial institutions. Just recently, AFC started establishing the Global Green Growth Institute-funded Inclusive Green Finance Policy for the national banking sector.

“We have a commitment not just to Papua New Guinea, but to the agriculture sector. We will find a way to assist the agriculture sector. We are happy to be part of this project and we are committed to making sure we can deliver it and continue the support to Papua New Guinea.”

Daniel Faunt, General Manager, Retail Banking, BSP Financial Group when signing the Memorandum of Understanding for starting project activities.

Signing of agreements between collaborating licenced financial institutions in Port Moresby.

For further information, please contact:

Sigitas Bubnys Team Leader sigitas.bubnys@afci.de