Final Evaluation of the Pacific Financial Inclusion Programme (PFIP)

Report Cover Image
Evaluation Plan:
2018-2021, UNCDF
Evaluation Type:
Others
Planned End Date:
06/2020
Completion Date:
12/2019
Status:
Completed
Management Response:
Yes
Evaluation Budget(US $):
189,953

The Pacific Financial Inclusion Programme (PFIP) was developed to support the expansion of financial inclusion in one of the least -banked regions in the world: the Pacific islands. The Pacific Islands Countries (PICs) form not only one of the least developed regions of the world but also the most underbanked. The Pacific Financial Inclusion Programme (PFIP) was launched in 2008 to increase financial inclusion and improve livelihoods among low-income populations, particularly among women, in Fiji, Papua New Guinea (PNG), Samoa, Solomon Islands (SOI), Tonga and Vanuatu with recent entry into Kiribati and Tuvalu. The first phase of PFIP (PFIP-I) was implemented between 2008 and 2014; by the end of 2013, 687,620 individuals and/or small and micro enterprises in the PICs had gained access to one or more financial service. PFIP Phase II (PFIP-II) began in 2014 and is slated to end in June 2020.  The goal of this report is to outline the findings from the final evaluation of PFIP-II.

PFIP-II is supported by the United Nations Capital Development Fund (UNCDF), United Nations Development Programme, the Governments of Australia and Zealand, the European Union’s Papua New Guinea (PNG) delegation and the UNDP-Russian Federation powered RESPAC. The latter provided indirect support to PFIP-II through the UNDP Disaster Resilience for Pacific Small Island Developing State project.

PFIP–II is organized by macro-, meso- and micro-level interventions implemented through three workstreams: 1) Policy and Regulations, 2) Financial Innovation and 3) Consumer Empowerment. PFIP-II also emphasizes the importance of financial inclusion through a gender- and human rights-lens, which are aligned with the United Nation’s goal of “Leaving No One Behind” in pursuit of the achievement of the Sustainable Development Goals.

 


 

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Document Type Language Size Status Downloads
Download document PFIP Terms of Reference.pdf tor English 1212.79 KB Posted 285
Download document UNCDF - UNDP - PFIP II Final Evaluation Final Report Dec 2019 ERC.pdf report English 1446.74 KB Posted 506
Download document Annex - Final Evaluation report PFIP -II.pdf related-document English 7064.01 KB Posted 583
Download document UNCDF - UNDP - PFIP II Final Evaluation Final Report Dec 2019 ERC Executive Summary.pdf summary English 314.42 KB Posted 407
Title Final Evaluation of the Pacific Financial Inclusion Programme (PFIP)
Atlas Project Number:
Evaluation Plan: 2018-2021, UNCDF
Evaluation Type: Others
Status: Completed
Completion Date: 12/2019
Planned End Date: 06/2020
Management Response: Yes
Corporate Outcome and Output (UNDP Strategic Plan 2014-2017)
Evaluation Budget(US $): 189,953
Source of Funding:
Evaluation Expenditure(US $): 189,953
Joint Programme: No
Joint Evaluation: No
Evaluation Team members:
Name Title Email Nationality
Rahul Ranjan Sinha Associate Evaluator rrsinha@grameenfoundation.in INDIA
Bobbi Gray Gender and Development Expert bgray@grameenfoundation.org
Vereimi Levula Regional Financial Service Expert vere.levula@gmail.com
Andy Philip Regional Financial Service Expert andy3636@gmail.com
Gaurav Chakraverty DFS & Market Development Expert gchakraverty@grameenfoundation.in INDIA
Gaurav Sinha Data Analyst
Wamiq Zia Data Analyst
Alok Misra Team Leader alokira@gmail.com INDIA
Prabhat Labh Evaluation Advisor plabh@grameenfoundation.in INDIA
Devahuti Choudhury Lead Evaluator devahuti.ch@gmail.com INDIA
GEF Evaluation: No
Key Stakeholders:
Countries: GLOBAL
Lessons
1.

PFIP II has developed a well-defined approach to achieve its overall objectives through three workstreams- Policy and regulation, Financial Innovation and Consumer Empowerment. The workstreams clearly map the intent of the programme to work at macro, meso and micro levels to bolster the market ecosystem for financial inclusion in the PICs.

The performance of PFIP II can be seen most pertinently at the macro level where the programme has worked to ensure a strong policy framework for the various market players to engage with. The programme has shown high levels of performance in driving national, regional and global synergies in ensuring relevant, efficient, effective and impactful outcomes in strengthening the policy framework for financial inclusion in the PICs. This has provided the first nudge required for the market ecosystem to work effectively in a well-regulated manner, especially in a region like the Pacific that is ecologically, socially and economically diverse with many unique challenges acting upon the growth of businesses in the region. The NFIS and the targets set by national governments and central banks towards the achievement of financial inclusion has also encouraged the evaluation of current legal entities and their ability to serve the low-income segments through sustainable business models in their current form. PFIP-II has also helped in review of such ancillary laws and frameworks such as the Insurance Act in Fiji, regulatory framework for microbanks in PNG, to help strengthen and provide more regulatory room for different entities to serve last mile consumers more effectively. PFIP-II has also conducted the mid-term review of NFIS in SOI and PNG and are seen by central banks as a critical stakeholder to provide technical guidance in the steering and implementation of the NFIS and its goals. PFIP country-level staff are also members of the different working groups that have been constituted by the NFIT to steer the policy and implementation discourse in financial inclusion and allied activities. The institutionalization of NFIS and subsequently of NFIT in the PICs has also helped align other national priorities around bolstering of sectors like agriculture and women’s empowerment with financial inclusion as the pathway and means to achieve ends that go beyond low-income segments accessing formal financial services.

The macro level intervention around policy strengthening has also led to changes at the meso level with the foray of larger financial entities like commercial banks, insurance companies, superannuation funds and Mobile Network Operators to test waters in the financial inclusion space and understand the dynamics therein. Programme inputs have been found to be highly relevant considering the PIC’s financial inclusion landscape and thereby the focus on DFS and agent banking that has been found to be well suited to the countries’ context. The financial innovation workstream facilitated the testing of new products, solutions and channels through the Innovation Hub by supplying FSPs with expert TA to bring in professional rigor. While this is work in progress with business models yet to show scale, the increase in the participation of a diverse set of actors in the financial inclusion space has led to more agility in the market while also giving it a competitive edge. PFIP-II’s results also share important lessons about cases like BIMA, Westpac, ANZ SOI, Mibank-Empawa partnership around project management, effectiveness, impact and sustainability of solution being implemented over the long run. Success of projects like Fijicare in Fiji and SINPF in SOI have also created a strong case for regional expansion whereby demonstration effects of such projects have propelled inter-country knowledge transfer for projects like Vancare in Vanuatu, VNPF and NASFUND in Vanuatu and PNG respectively. In spite of gender being a programme priority, no evidence of the development of gender-sensitive or gender-transformative products was found during the evaluation. When seen from the perspective of UNCDF’s maturity model of innovate-leverage-scaleup, most projects for PFIP II are at the innovation stage with only about 10% of projects that have shown the potential for scale-up.

At the micro level, the consumer empowerment workstream has focused on mainstreaming financial education through school curriculums in Fiji and through TVET institutions in SOI and PNG. These initiatives have been appreciated across the board for preparing students and youth for better financial planning and wealth management once they enter the workforce. The work with TVETs have not achieved scale but there is enough proof of concept for the next phase of PFIP to take such initiatives to scale. On the client protection front, there is evidence of focus and alignment with SMART Campaign’s Client Protection Principles as seen documented in some of the recent PADs. However, in practice there is no evidence of projects or TA that are entirely focused on bolstering consumer protection either for individual PFIP commissioned projects or at a policy level for the market as a whole. Given the diversity of the Pacific region and the lack of access to information and therefore recourse for grievance redressal, consumer protection is a very important theme to be developed and implemented. Primary data collection by the evaluation team showed that PFIP II has made significant contribution to a majority of changes observed in consumer level awareness, access and usage of financial services. Though there is access to bank accounts, usage and frequency of usage is low. There is a significant difference between men and women in both awareness and usage except for awareness around DBTs and Pensions, in which women demonstrate higher level of awareness.

Knowledge products have been very important outputs at each level of the 3 key workstreams under PFIP-II. Studies to scope out demand side dynamics for different countries are singularly the only documents that have credible demand-side information on the access to financial services with some key insights on the determinants of financial behaviours among end consumers. These documents have been referenced by stakeholders for not only the financial innovation workstream but also by policy makers and the central banks in setting the course for the crafting of NFIS, its guidelines as well as for target setting. The DSS has also helped demystify the demand-side dynamics for FSPs who have ventured into the business of offering financial services to the informal sector, especially outside the urban centres where most of the financial services are generally focused. At the policy level, mid-term reviews of NFIS in SOI and PNG have also aided in monitoring progress and suggesting changes within the policy architecture as well as the implementing bodies to create a more efficient financial inclusion ecosystem in the two countries. In addition, studies such as the regulatory framework of microbanks in PNG recognise the importance of entities that have the intent and distribution network to reach last-mile consumers but not enough regulatory room to operate in. Such studies have helped FSPs and central banks alike in tweaking the policy ecosystem to provide a more conducive market environment. Similar initiatives like TA for the Insurance Act in SOI and the Consumer Credit Act in Fiji have shown PFIP’s ability to bring in the much-needed global expertise to aid the growth of financial services in the Pacific region. Overall, knowledge management was highly effective during PFIP -II with research and TAs, enabling the development of financial inclusion ecosystem in the country. However, efforts in documenting and creating institutional memory have to be further streamlined especially in cases of project failures such as BIMA. Communication of programme updates has been found to be very effective and appreciated by stakeholders across the board.

PFIP-II institutionalised a Results Management Framework (RMF) to help collect, analyse and report partner level data as part of programme monitoring as well as to ensure accountability towards the objectives of the programme as set out through the results management hierarchy document. While comprehensive, the RMF could not accurately report on the outcomes of the programme with gaps in data collection from partners as well as in the analysis and reporting thereof. This is an area for improvement for the next phase of PFIP as well as an area of concern for stakeholders, especially donors supporting the programme. Further, the RMF, in its current form only covers a very linear impact pathway without accounting for the possible development impacts on SDGs that access and adoption of financial services can create.

In terms of the team spearheading the PFIP-II programme implementation, the quality of technical assistance provided by PFIP-II staff and TSPs was found highly efficient and resulted in efficiency gains for the programme. PADs were found to be very detailed and efficient in terms of recording performance indicators, disbursement schedules & conditions, activities and outputs expected from the project. Integration of technology to offer digital or digital aided solutions also contributed to efficiency gains. Most of the mid-term review recommendations were recognised and implemented by the programme team barring the recommendation pertaining to the hiring of gender specialist and grant management especially where multiple partners are involved.

Overall, the programme has been found to be relatively cost-efficient with an average cost per PFIP-II clients reached at USD 19.8. It is expected to decrease as outreach numbers from newly sanctioned programmes feed into programme outreach. However, it discounts the work done under Policy and Regulation workstream of PFIP-II, which is one of the strongholds of the programme. In terms of achieving the output targets, PFIP-II was moderately effective and achieved 6 out of its 11 targets set across the three workstreams. It has performed well to mostly achieve the targets set under Policy and Regulation workstream though there was a significant gap in achieving targets under Financial Innovation and Consumer Empowerment workstreams.

In terms of sustainability, on the policy front, the programme interventions have been found to be highly sustainable through the institutionalization of NFIS in countries where PFIP-II is operational. For financial innovation projects, the programme shows low sustainability with only about 10% of total projects (Fijicare and SINPF) showcasing any evidence of financial sustainability reached by end of programme. Twenty percent of projects have only been recently commissioned and cannot be evaluated in this area. PFIP-II inputs around TA have played a key role in securing buy-in from partners and ensuring professional rigor in offering financial services through innovative operational models. Consumer empowerment initiatives have been moderately successful overall with high success rates noted for curriculum integration for schools and TVET programmes. Initiatives around embedding consumer education through FSPs are few and far between, thereby discouraging any analysis around the sustainability thereof.

 


 


Findings
1.

4.1. Relevance

EQ 1 - How well designed is the programme to meet its broader objective of enabling access of financial services to low-income Pacific Islanders?

  • High performance in driving national, regional and global synergies in policy work. Contribution in making Financial Inclusion a key priority for respective governments is commendable.
  • High relevance of the programme considering the PIC’s financial inclusion landscape. Focus on Digital finance and Agent banking well suited to the countries’ context.
  • Wide range of partners well suited to the programme design requirements; especially in policy and financial education workstream.
  • Focus on gender exemplified through outreach numbers in NFIS and performance-based agreements under financial innovation; negligible evidence of gender-focussed products or channels.
  • Focus on Client Protection limited to performance-based agreements under financial innovation workstream.
  • Knowledge Management function’s relevance is high seen with replication of models and channels across countries but not commensurate in documentation

Tag: Relevance Gender Equality Gender Parity Knowledge management Programme Synergy Programme/Project Design Financial Inclusion Technology Policy Advisory

2.

4.1.1 Synergy with Global and Regional initiatives

The UNCDF Strategic Framework 2018-2021 aims to support the achievement of Sustainable Development Goals 1 (No Poverty) and 17 (Partnerships for SDGs) in Least Developed Countries by making finance work for inclusion in collaboration with UNDP and other United Nations partners. The three work streams of PFIP-II namely policy and regulation, financial innovation and consumer empowerment take a market-led approach to address financial inclusion challenges at policy, institutions and client level (macro-meso and micro). The emphasis of PFIP-II on digital channels and introducing innovative products and services is evident, be it M-PESA in Fiji and its regional expansion or BIMA in PNG and Fiji or Go Money channel in PNG, Solomon Islands and Samoa. This strategic focus on digital channels not only aligns with UNCDF’s strategic framework but is also highly relevant for PICs geographical context. 15 Further, PFIP being a joint programme with UNDP also fits in with UNDP’s focus on “Digital Economy” and in a few areas benefited from it.

PFIP-II has a synergetic relationship with other global and regional initiatives such as PIRI and AFI that focus on financial inclusion. PFIP’s policy and regulation workstream through its provision of technical support to policy makers for strengthening the digital finance ecosystem is closely aligned with the annual regional priorities of PIRI. PFIP -II’s grant to AFI to enable select member countries of PIRI to scale up their engagement on cross border policy issues is an example of synergy with other initiatives. PFIP is a member of the PIRI’s Expert Group on Financial Inclusion Policy. PFIP’s work in building synergies with other global initiatives is evident through its push for PNG, Solomon Islands and Fiji to sign up to the Better than Cash Alliance (BTCA) as well as adoption of Money Pacific Goals by almost all PICs. A key milestone of Money Pacific Goals is to halve the number of Pacific Islanders without access to financial services. PFIP also has a working relationship with the Pacific Islands Forum Secretariat (PIFS), which is a grouping of 14 PICs plus Australia and New Zealand. It is a high-level forum for the region wherein the Prime Ministers/ Presidents of these countries meet each year to deliberate on regional priorities. PIFS is appreciative of PFIP-II’s work on FinEd, bundled insurance and digitising G2P payments, which fit in with its priorities.


Tag: Harmonization Innovation Programme Synergy UN Agencies UNDP Management UNDP management Financial Inclusion Policy Advisory Technical Support Agenda 2030

3.

4.1.2. Demand for Financial Inclusion

As mentioned earlier, the demand for financial inclusion across services, savings, insurance, pension and credit in the region remains high. Estimates on extent of exclusion was not available earlier. Commissioning of Demand Side Surveys (DSS) by PFIP-II enabled the policy makers to monitor progress against an empirical baseline. Even after 6 years of work by PFIP-I & II put together, the DSS reports still show high levels of financial exclusion. Various studies commissioned under PFIP-II on specific topics have added to a more nuanced understanding about exclusion. A feasibility study on superannuation products in Vanuatu brought out that 50% of respondents did not make any provision for old age. It also showed that mobile phone ownership in countries except PNG– Solomon Islands (62%), Fiji and Vanuatu (80%), PNG (40%) remains high.

The financial innovation workstream of PFIP-II reflects appreciation of the demand side gaps and as such digital projects dominate the product suite funded by PFIP-II. Exclusive digital projects like HFC Bank- Vodafone Integration and Mobile Village Agents in Fiji, Go Money platform of ANZ Bank in the Solomon Islands, other projects also have a strong digital component. PFIP-II’s work with Westpac in PNG envisaged redesigning the agent model and customer onboarding through digital platforms. Engagement with Mibank entailed integration of Pay -As- You-Go platform of solar product companies with MiBank’s mobile money platform. The focus on digital solutions under PFIP-II is appropriate to the context and fits in with UNCDF’s strategic framework as well as the focus of other regional and global initiatives like AFI.

Insights from Client surveys and FGDs conducted by the evaluation team also provide a strong support for the digital strategy. In Fiji, only 32% of surveyed clients were aware of any bank branch/agent near their community. FGD with WMBL clients in PNG brought out that before Mamabank Access Points (MAPs), they had to spend ~$2.5 on transport to make a banking transaction. As such, PFIP-II’s focus on digital and agent banking is highly relevant.


Tag: Innovation Monitoring and Evaluation Financial Inclusion Technology Data and Statistics

4.

4.1.3. Nature and Type of Institutions/ Agencies supported

PFIP-II has engaged with a range of institutions/ agencies during the five-year period (2014-2019). The spectrum ranges from Government Ministries to technology companies. Annex 18 has a detailed list of entities engaged by the programme to create relevant synergies to achieve the desired programme outcomes. The diversity of institutions/ agencies supported by PFIP fits in with the three workstreams of PFIP-II. The policy work necessitated engagement with the Central Banks and Government departments, while PFIP’s financial innovation work is spread across both public and private sector institutions. The public sector has a monopoly hold over micro-pensions in the PICs and therefore are a key stakeholder for PFIP-II, while private sector engagement has been in diverse areas. A positive feature has been sharing of best practices for adoption in other countries (more details in the section on knowledge management).

PFIP-II did not adopt the usual process of inviting proposals and selecting partners but followed the practice of having discussions with potential partners and going ahead with the interested agency. A deep dive into the reasons for this unique approach in the Pacific countries is detailed in the Efficiency section. The Project Appraisal Document (PAD) is discussed and approved by the Investment Committee and it details the logic of interventions and proposed funding. Thematically, under financial innovation, the focus across countries was on mobile money, pension, insurance and agent banking. Projects like distribution of solar products, microfinance expansion and smartphone app for farmers are isolated instances.


Tag: Innovation Partnership Programme Synergy Country Government Financial Inclusion Private Sector

5.

4.1.4 Cross Cutting Issues

NFIS-II in Fiji for the period 2016-2020 states “The overall target of this Strategic Plan is to increase the formally served adult population from 64 percent to 85 percent (by 130,000 adults), of which at least 50 percent are women” and has “Empowerment of Women, Youth and those living with disabilities” as its top strategic goal. NFIS-II in PNG for 2016-2020, while setting the goal of 2 million additional bank accounts by 2020 stipulates that 50% of it should be women. In this context, efforts on Gender mainstreaming is evident in the framework design of the different workstreams- policy, financial innovation, consumer empowerment and is adequately represented through the background documents to guide implementation such as the Performance Based Agreements (PBAs) with the grantees.

Under financial innovation, there are few projects which are solely focused on women- though it is more a feature of the institutional focus. SPBD Microfinance, which has exclusively women clients, was assisted in Solomon Islands for expansion in rural Guadalcanal and western province. Similarly, Women’s Micro Bank Limited was supported in PNG to set up satellite branches called Mama Access Points (MAPs) and through that reach out to 20,000 new clients – all women. Other mainstream projects also have a clear gender component. SINPF’s YouSave pension product in its scale up phase is targeted to reach 30,000 unique clients by 2022, out of which 50% have to be women. However, it is observed that leaving aside exclusive women-focused interventions – which are few - the gender strategy does not go much beyond outlining the need for gender disaggregated data in PAD and placing a target percentage in PBAs. In such cases, the gender outreach reported is not due to any specific focus of the products or women friendly features and more due to population sample characteristic. Overall, gender, as a cross-cutting theme and as a key strand for the achievement of UNCDF’s strategic objectives has been efficiently incorporated into the design of the PFIP-II architecture. This is made evident by the design of the programme document (prodoc), gendered approach in designing of the three key workstreams, PADs to guide implementation and genderfocused knowledge products such as the PoWER diagnostic studies.


Tag: Gender Mainstreaming Gender Parity Women's Empowerment Innovation Programme/Project Design Strategic Positioning Disabilities Financial Inclusion Micro-credit Women and gilrs Youth

6.

Agency banking as a way to reach under-served populations was a dominant theme across financial innovations under PFIP-II, relevant due to its applicability to the PIC context where bank branches are concentrated only in a few urban/peri-urban areas. Various projects not only piloted agent banking, but also used it as a feature to build synergies with other financial products to increase the viability of agency banking. In Fiji, out of 4 operational projects under financial innovation, Mobile Village Agents of Vodafone and HFC bank had agency banking as the core design. In Solomon Islands, two projects (ANZ Go Money and Use of Airtime for Payments) are built on agency banking. In order to increase volumes under Go Money, two additional projects (Digitising School Fees and Coconut Value Chains) were supported under PFIP-II. PFIP-II’s engagement with the National bank of Vanuatu includes using five main branches to set up five additional smaller branches – akin to agents. PFIP-II’s work with Westpac, Women’s Micro Bank Limited (WMBL), Mibank in PNG are also examples of an agent banking emphasis. New strategies were also tested for viability; MiBank is being assisted through setting up of an innovation lab to test different agent models focussing on agri-value chain.


Tag: Urban Programme Synergy Programme/Project Design Service delivery Financial Inclusion Value Chain

7.

4.1.5. Knowledge Management

Knowledge management under PFIP-II can be seen from two perspectives. First, a dedicated vertical work stream focused on distilling and sharing knowledge from various projects. Secondly, the approach of having feasibility studies in priority areas and working on recommendations coupled with using tested model from one country to be replicated in another. In terms of first approach, PFIP-II did not have a defined knowledge framework for much of the implementation period which is now being rectified via a dedicated person hired in late 2018. As of now, knowledge management overlaps with the communications work stream and many knowledge products in the form of product flyers, programme brochures, videos, change stories have been produced, extracting information from programme managers and the Results Management Framework. The work done by communications was highly appreciated by the partners and its mass message videos have been popular with prospective clients.

The second approach of knowledge management has been highly relevant to the objectives of PFIPII. A range of knowledge products were funded and products rolled out/being considered as part of it. A scoping study on pensions done by Blue Print Pension Services (BPSS) in Fiji led to engagement with Fiji National Provident Fund for rolling out a pension product for informal sector. Though the project failed to get steam in Fiji, a similar study has led to a successful pension scheme being launched for the informal sector in Solomon Islands. Now PFIP is trying to replicate the success in Vanuatu and PNG. National Superannuation Fund in PNG was assisted in 2019 for testing and piloting a pension product “Agri Supa” for informal workers in the agricultural and allied sectors. Another example comes from PFIP-II’s work in bundled insurance. High outreach achieved by Fiji Care’s bundled insurance has led to expansion of the idea in Vanuatu through Fijicare’s subsidiary Vancare. Life Insurance Corporation in PNG is also being assisted to offer a bundled insurance product. The case of M-PESA’s proposed expansion in Vanuatu (M-Vatu), Kiribati and Samoa (M-Tala) rides on PFIP’s support to M-PESA in Fiji. These cases point not only to active knowledge sharing but also making it work in other countries and can be seen as a case of market development.


Tag: Agriculture Communication Knowledge management Service delivery Financial Inclusion

8.

4.2. Efficiency

EQ 2 - How well has the programme delivered the expected results?

  • Relatively cost-efficient programme with an average cost at USD 19.8 for every client reached. However, it discounts the work done under Policy and Regulation workstream of PFIP -II, a stronghold of the programme.
  • PFIP -II benefited from strong programme management and supervision structure at country and programme level. However, quality of data generated under the Results Management Framework was an issue and affected the programme efficiency.
  • Project Appraisal Documents (PAD) were found to be very detailed and efficient in terms of recording performance indicators, disbursement schedules & conditions, activities and outputs expected from the project.
  • Most of the Mid Term Review recommendations were followed by the programme with the exception of hiring of gender specialist and grant manager
  • Quality of technical assistance provided by PFIP -II staff and TSPs resulted in efficiency gains for the programme.
  • Under the Knowledge Management function, efficiency monitoring was barely adequate but found to be high for generation of knowledge products and Communication practices, that were appreciated by stakeholders across programme countries.

Tag: Efficiency Communication Human and Financial resources Knowledge management Operational Efficiency Project and Programme management Quality Assurance Results-Based Management Technical Support

9.

4.2.1 Use of Funds (Cost-Effectiveness)

An overall cost per client can be calculated using total money spent by the programme against PFIP - II outreach. As per Table 7 below, the average cost per PFIP -II client reached is USD 19.8. This calculation considers the total outreach of PFIP -II at 1,183,228 (product wise highest outreach at any point of time and not the current outreach) and total programme disbursal at USD 23.48 million as on 31 March 2019. In case, the current outreach of the programme is taken into account for calculation, the average cost per PFIP -II client reached is USD 30.1. However, this fails to adequately measure PFIP-II’s contribution as it discounts the work done under Policy & Regulation workstream, which has otherwise been highly effective in supporting the financial inclusion aspirations of the PIC governments in addition to shaping them in the first place.

A total of 31.04 million USD was commited by PFIP -II till June 2019 and the programme was left with a balance of 4.7 million USD in its final year. By March 2019, PFIP -II had commited 29.59 million USD and disbursed 23.48 million USD. Major categories of expenditure under this were grants under three workstreams (13.03 million USD), grants for TA (4.51 million USD), Other costs (10.84 million USD) and GMS (1.20 million USD). Furthermore, Table 8 presents the segregated view of disbursement for the three workstreams. If only disbursement is considered, 59% of the committed amount for grants to institutions under three workstreams was disbursed until March 2019.


Tag: Efficiency Human and Financial resources Operational Efficiency

10.

4.2.2. Project Formulation

Identification and formulation of projects during PFIP-II was efficient and the appraisal documents clearly describe the intervention logic, justification for funding as well as progress indicators. Grant proposals are carefully evaluated by the Investment Committee team and instances have been noted, such as for automation of BIMA PNG back end systems in 2018, where the IC team rejected the proposal due to their inability to show sustainability in the long run. PFIP made decisions based on three core criteria: 1. That the proposed initiative will create a solution that may have the potential to benefit a large number of low-income people; 2. That the solution is operationally feasible and the implementing entity is capable of developing the solution; and, 3. That the solution is eventually commercially profitable at scale.

Project Appraisal Documents (PAD) were found to be detailed and efficient in terms of recording the market gaps warranting the need for the project and the project management cycle to define the implementation and monitoring thereof. Integration of gender-based targets in most of the PADs strategically fits in with PFIP -II’s as well as overall UNCDF’s strategy. These are necessary conditions for efficient project formulation and implementation for any programme and PFIP -II rates high on these parameters. On the budget, PADs clearly identified project activities, budget per activity and contribution of both PFIP-II and the implementing partner. This has helped transparently set the expectations for PFIP-II committed funding. Overall, PFIP -II has been highly efficient in terms of project formulation and the details included in Performance Based Agreements were important in ensuring that projects undergo the necessary scrutiny before approval.


Tag: Gender Mainstreaming Business Model Implementation Modality Oversight Programme/Project Design Sustainability Vulnerable

11.

4.2.3. Efficiency of RFA/PBA process

In principle, PFIP -II had defined processes for eligibility criteria, pre-approval process and selection criteria for collaborating with partners though these were rarely followed due to operational complexities and market conditions in PICs. The market is catered by a small number of players and generating interests via Expression of Interest or Request for Application was reported as an ineffective way of developing partnerships in the region by the programme team. The evaluation team concurs with the view. In many cases, PFIP staff supported the organisation in proposal development using the inputs from the partner organisation. PFIP -II regularly engaged with IC members during proposal development, and they were well informed in advance about developing intervention ideas. The Resident Representative of UNDP is part of the IC and the higher visibility brought by UNDP helped PFIP widen the canvas of institutions it worked with. However, the documentation leading to the final approval of an implementation partner does not compare the selected institution/agency with other market players and establish a clear logic for preferring one over another. Though in some monopoly cases like Provident Funds, this observation does not apply.


Tag: Efficiency Partnership Policies & Procedures

12.

4.2.4. Programme Management and Supervision

PFIP -II has a strong programme management and supervision structure in place, built upon the management systems governing PFIP-I. The programme is managed through a regional office at Suva, Fiji and in-country offices in programme countries. At the highest level, the programme implementation is overseen by UNCDF HQ to deliberate upon the different financial instruments deployed in the region, Financial Inclusion Practice Area (FIPA) and UNDP Pacific Centre and has management arrangements for multi-donor participation. The programme coordination is vested in the Joint Investment Committee (JIC) which meets annually with investment approvals primarily granted through emails. Stakeholder consultations during the field mission phase recorded regular deliberations on project approval, programme expenditure, reports to donors and close oversight of the programme progress and challenges. The evaluation team finds these as positive signs of efficient programme management and supervision.

PFIP-II’s engagement with other UN agencies has been largely limited, with a few examples of initiatives. In PNG it collaborated with UNDP on MiBank Solar loan project which was eventually shelved due to governance challenges within the partner organizations. It engaged with Disaster Resilience for Pacific Small Island Developing States (RESPAC16), a UNDP-Russian Federation collaboration, during the development of bundled insurance product with the ambition of developing parametric insurance. PFIP-II has also worked with UN Women for the implementation of their Markets4Change programme. The collaboration resulted in UNW facilitating commercial banks such as Westpac Fiji, Bank South Pacific (BSP) in PICs to deliver business education training to women market vendors. However, as validated by stakeholders such as the UN Resident Coordinators in PIC, for PFIP-II and other UN agencies to have optimal impact, greater inroads need to be built to facilitate cross fertilization of ideas between UN agencies and joint implementation efforts.


Tag: Harmonization Implementation Modality Joint UN Programme Operational Efficiency Oversight Project and Programme management UN Agencies Coordination

13.

As made evident by the Back to Office Reports (BToR) shared during the inception phase of the evaluation, the evaluation team recorded evidence of close coordination between the regional team at Suva and in-country teams. In the case of PNG, delays in securing the country staffing for Phase II of PFIP has also affected efficiency in economising time and resources. The current PNG country lead was deployed after almost a two-year gap between 2015 and 2017, leading to a significant impact on the timely commissioning of projects in PNG. Finally, the programme made efficient use of linking disbursements with achievements with fairly strong decisions made when requisite outcomes were not recorded for projects and partners (examples: Fiji National Provident Fund, Capital Insurance, Westpac PNG).

Programme monitoring during PFIP -II can be considered only moderately efficient with many of the partners not reporting on the complete indicator list mandated in the data collection tool. PFIP -II relied on self-reported data from the partners for reporting and there was no monitoring system instituted at the programme level to review to ensure authenticity and adequate coverage of reported data. During the field-mission, the evaluation team found the reports to donors focused more on programme outputs than on outcomes and impact. Annex 10 includes one of the sample formats for the data collection tool. The RM advisor confirmed that the partners have been unwilling to report on many indicators. Evaluators noted during the stakeholder interviews that the Data Collection tool used, while comprehensive, is also painstaking to compile. In a few stakeholder consultations, donors expressed their concern around the paucity of outcome and impact level data, suggesting it as an area of development. Furthermore, they felt addition of outcome/impact details in the report will help in demonstrating the impact of PFIP -II to decision making authorities within the donor organisations. The evaluation team concurs with this.


Tag: Monitoring and Evaluation Technology Coordination Data and Statistics

14.

4.2.5. Quality and efficiency of oversight

he planning and management of programme activities by PFIP -II has been of high quality and it was acknowledged by stakeholders across the programme countries. Continued engagement of PFIP -II staff was reported by stakeholders across the programme countries and was seen as a necessity by many of the partners, especially policymakers and regulators. The programme governance and oversight at the regional level was found to be efficient with visits from programme team members for multiple activities such as communication, technical assistance, programme review.

Fund disbursement for grantees was found largely efficient and timely with most of the grantees not expressing any concerns with disbursement. However, in a few cases such as the Ministry of Education in Fiji, grantees highlighted it as a concern. They reported it as a long process resulting in pulling funds from its own budget to make FinEd payments. Similarly, in SOI, the pilot for airtime project was delayed by more than a couple of months as funds were not released from Suva office.


Tag: Communication Human and Financial resources Operational Efficiency Oversight Technical Support

15.

4.2.6. Results Management Framework

PFIP Phase II has a Results Management Framework (RMF) that is designed to capture the high-level outreach of each PFIP-supported project. It was revised on the basis of recommendations received during the midterm review of the programme and designed with quantifiable indicators at output, outcome and objective level aimed at capturing programme’s impact. The Key Performance Indicators (KPI) definitions are mostly well-defined for most indicators, barring a few that are vague or qualitative in nature. For e.g. Quality of consumer protection mechanisms (no quantifiable measure for measuring quality), Core financial inclusion policy domains enabled (no definition of ‘enable’), number of active NFITs (no definition of ‘active’) are some examples.

Targets defined for the indicators identified in RMF were set at the programme level and there were no country-level targets for the programme. PFIP -II was able to report on most of the indicators, except: 1) % of G2P/P2G payments through a digital channel, 2) Core FI policy domains enabled and 3) Quality of consumer protection mechanism. The outreach figures reported by FSPs were incomplete in few cases as they lacked location17 or gender18 segregation or activity rates19. It impaired the granularity of outreach data and consequently, the reporting against indicators. Annex 11 includes the outreach of the programme as reported under RMF, juxtaposing it with evaluators findings.


Tag: National Programme/Project Design Results-Based Management

16.

4.2.7. Quality of Service Delivery

Technical Assistance provided under PFIP-II supported the grantee institutions in strengthening their systems, providing capacity-building support, conducting needs assessment, market research, product development, financial education curriculum development and conducting training of trainers, development of a viable business model and design of alternate delivery channels in line with the UNCDF maturity model to foster innovation for proof of concept, leverage learnings to unlock private and public resources and scale-up of successful business models. During PFIP -II, TA was provided to grantee institutions at two levels: PFIP Team and Technical Service Providers. The quality of TA provided by PFIP-II team was found to be valuable across the programme countries and was widely appreciated during the stakeholder consultations. A few examples of these are Mid Term Review of NFIS -II in PNG and SOI, FinEd material developed by PFIP -II, participation in working groups of NFITs across countries. PFIP-II’s ability in bringing new ideas and anchoring its implementation was widely appreciated by FSPs, regulators and policymakers across programme countries.20 Overall, TA provided by PFIP-II staff was highly efficient in generating innovative ideas and supporting the implementation of those in programme countries.

PFIP -II also engaged with Technical Service Providers (TSPs) regularly for conducting feasibility & research studies, market research, product/service development, institutional assessments under the programme. In addition, PFIP also offers additional TA in the form of on-site consultants to support the innovation projects. PFIP -II used UNCDF and UNDP procurement systems, interchangeably, for recruiting such individuals and agencies for technical assistance. In cases of recruitment through the UNDP procurement system, delays were reported during KIIs with PFIP-II staff in PNG and SOI. Subsequently, it resulted in a delay in initiating project activities. Life Insurance Corporation Limited (LICL) and MiBank agri-focused agent network project in PNG being a few such examples.


Tag: Human and Financial resources Innovation Procurement Service delivery Education Capacity Building Institutional Strengthening Technical Support

17.

4.2.8. Cross-Cutting Issues

4.2.8.1. Knowledge Management

PFIP -II’s performance with regard to the efficiency of knowledge management activities is acceptable. A Knowledge Management Specialist, responsible for documenting and disseminating the learnings from PFIP -II, was appointed only in September 2018. In addition to KM, the specialist also engages in preparing quarterly reports and annual work plan of PFIP -II.

A total of 26 knowledge products21 were developed under Policy and Regulations and Financial Innovation workstream of PFIP -II. Most of these knowledge products were well received by partners and intensively used in the development of policy and regulations, product/service development across the programme countries. Demand Side Survey conducted in 5 countries was used for the development of NFIS; micro-pension research was used for the development of youSave product in SOI and for VNPF in Vanuatu; insurance guidelines were developed for Fiji and SOI and Mid Term Review of NFIS was conducted in PNG and SOI. Similarly, Impact Pathway study in Fiji, SOI and PNG is being efficiently used to create inroads into more efficient measurement of project outcomes and impact at the client level. In a few cases, the timing of commissioning and releasing of knowledge management projects has led to low efficiency. For e.g. PoWER diagnostic was released only in 2019 towards the end of the programme tenure and partners could not make best use of it to realise programme goals at that point of time. Overall, knowledge products developed during PFIP -II were found to be useful in pushing for insights-based decision making but for many critical programme areas, particularly for gender, the timing of product commissioning and completion has affected efficiency of knowledge management activities.


Tag: Challenges Communication Innovation Knowledge management Policies & Procedures Financial Inclusion

18.

PFIP -II also supported training and knowledge sharing by sponsoring partner staff for courses at the Boulder Institute, exposure visits and scholarships through Reuben James Summerlin scholarships to facilitate learning and knowledge transfer within the region and globally. To foster innovation and entry of new players in the Pacific, initiatives such as the Pacific-ASEAN Financial Innovation Challenge conducted in February 2019 have been efficient in creating inroads for new fintech companies to enter the Pacific market in collaboration with PFIP-II partners. Though there is an effort to streamline and collect gender disaggregated data through the data collection tool and the Results Management Framework (RMF), efficiency in data collection and reporting falls short of expectation since many parters have not been able to consistently report for gender specific metrics (also a function of negligible number of gender specific interventions)


Tag: Gender Parity Knowledge management Partnership Results-Based Management Capacity Building Data and Statistics

19.

4.2.8.2 Communication

PFIP -II recruited a full-time communication specialist in 2016 with an aim to consolidate its efforts in engagement with a wider audience within and outside Pacific. PFIP benefited from speedier recruitment of local staff through the UNDP Fiji office. The specialist worked to document best practices, videos, impact stories, pamphlets on innovation products and press releases for PFIP-II. These are regularly published in the quarterly/semi-annual reports of PFIP -II. Social media channels were also leveraged to share programme achievements and news. PFIP has active social media accounts on Facebook (4278 likes), LinkedIn (124 followers) and Twitter (1302 followers)22. The Instagram account was found dormant with no posts yet. With a one-member team, the communications function at PFIP -II was found highly efficient in terms of generating high-quality communication and marketing material for the programme with significant contribution to the knowledge management activities as well. Marketing materials developed for partners generated high recall about the product/services. In sum, the vertical has efficiently created wider recognition of the programme within and outside PICs.


Tag: Communication Human and Financial resources Knowledge management

20.

4.3. Effectiveness

EQ 3 - To what extent is the programme on track to increase the capacity of partner organisations to deliver good quality and sustainable financial services to low-income populations, particularly women? EQ 4 - To what extent is the programme on track to influence the broader financial inclusion system in the countries where it operates?

  • PFIP -II was moderately effective in achieving the desired programme outputs and achieved 6 out of its 11 targets set across the three workstreams. It has performed well to achieve targets set under Policy and Regulation workstream, though there was a significant gap in achieving targets under the Financial Innovation and Consumer Empowerment workstreams.
  • Under the consumer empowerment workstream, FinEd projects in Fiji, SOI and PNG has been found to be highly effective in building a financially literate generation of youth in these countries.
  • In spite of gender integration being a key focus area for PFIP II, no evidence of development of gender sensitive or gender transformative products was found during the evaluation.
  • Knowledge management was moderately effective during PFIP -II with research and TA, enabling the development of financial inclusion ecosystem in the country. However, efforts in documenting and creating institutional memory have to be further streamlined especially in cases of projects such as BIMA, Westpac and MiBank Solar loan.
  • The market demonstration effect in terms of influencing other FSPs in the programme countries to adopt targeting low-income households for providing financial services was limited to date in the absence of solutions that have worked at scale. However, the demonstration effect at policy level can be classified as highly effective with PFIP -II playing a central role in policy landscape across the programme countries nudging towards formalising the financial services sector for low income populations.
  • With its effective programme management and approach, PFIP -II has enhanced UNCDF’s comparative advantage and positioning within the area of financial inclusion and digital finance in the region.

Tag: Effectiveness Gender transformation Knowledge management Service delivery Financial Inclusion Poverty Alleviation Poverty Reduction Technology Capacity Building Institutional Strengthening Policy Advisory Youth

21.

4.3.1. Understanding financial needs and tailored services for low-income households

PFIP -II interventions have been found to be effective in helping partner FSPs develop a deep understanding of financial needs of low-income communities across the countries. Design and roll-out of bundled insurance in Fiji, Vanuatu and PNG is one such example. Development of these financial products/ services followed a methodical process by using tools such as market research, cost-benefit analysis, Human-Centred Design for effective design. For example, youSave – pension product for the informal segment in SOI used HCD principles and was supported through TA by BluePrint Pension Solutions (BPPS).

Many partner institutions such as SINPF, Vancare, among others had been operating in the Pacific region for a significant period of time, but their product basket targeted only the mid- and high-income segments. In several cases, engagement with PFIP -II led to a better understanding of the bottlenecks affecting access and usage, which subsequently informed revision in the FSP’s strategy. For example, focused exclusively on women customers, WMBL is overcoming access barriers by leveraging technology for client acquisition in rural PNG through their biometric-enabled MAPs by addressing KYC and access barriers. There has been a realisation of the existing demand for financial services at the client level, made evident by increased uptake of financial products/ services in the region. This was further corroborated during the KIIs with stakeholders and FGDs with clients during the countrymissions. Clients reported that they have a better sense of the options available to them and the overall engagement with FSPs has led to benefits in terms of safety (especially from climate-related hazards, crime), financial management (access to pension products, credit for business in some cases) and savings on opportunity cost (due to reduced travel time, access to banking points).


Tag: Women's Empowerment Service delivery Financial Inclusion Poverty Alleviation Poverty Reduction Technology

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4.3.2. Development of alternate delivery channels and business models

PFIP -II has, through its various interventions, focused on improving alternate channels for banking given the unique geographical and infrastructure related challenges that define the PICs. Mobile Financial Services that saw a surge in registrations since 2010, when they were first launched in countries like Fiji and PNG, quickly wound down after the initial uptake with most of the subsequent usage restricted to mobile phone recharge. PFIP-II, through its project commissions has built upon the work of PFIP-I to innovate models around branchless banking, particularly leveraging the existing MNO outreach. (Vodafone M-Pesa, TVL M-Vatu, ANZ goMoney), branchless banking (HFC Bank), biometric-based client acquisition (WMBL) and airtime for payments and savings24 are a few examples of PFIP-II initiatives. Some of these interventions like Vodafone M-Pesa25 have already been scaledup after a successful pilot phase, while some of them such as agency banking with HFC Bank26 in Fiji and ANZ goMoney27 did not yield expected results. PFIP -II was able to promote and support such ideas across countries as was also deeply acknowledged by stakeholders during the KIIs.

These new delivery channels developed under PFIP -II were moderately effective in expanding access and usage mostly with mixed results. MAPs in PNG is an example of an effective intervention that expanded the access of financial services in rural areas of PNG, with singular focus on women. An intervention with HFC Bank in Fiji on the other hand did not yield the desired result of enabling financial inclusion in rural areas of Fiji where despite immense potential through a tri-partite relationship between the bank, Vodafone and agent, the clients still seem to prefer M-Pesa despite higher charges for the latter. BIMA withdrawing its business in Fiji and PNG was a setback for PFIP -II, considering the effort and resource invested in it by PFIP-II. It had a significant client outreach in both the countries with the potential to define the nascent microinsurance sector. However, since BIMA’s exit, not only are the clients again excluded, there is loss of appetite among market players to take up microinsurance at scale. The airtime project in SOI is yet to be rolled out and its effectiveness can only be assessed after a gestation period. The project design, in principle, is sound and may effectively deliver financial services in rural areas of SOI.


Tag: Challenges Effectiveness Rural Business Model Innovation Programme/Project Design Service delivery Financial Inclusion Infrastructure Private Sector

23.

PFIP -II was also able to facilitate the convergence of public and private sector players in the development of alternate delivery channels and business models. Pilot use of airtime for payments and savings in SOI is one such example, which brought together private sector – MNOs, public sector – SINPF & billers and regulator – CBSI in designing and testing the concept. It can be seen as an excellent example of how PFIP -II has established itself as a laboratory for product and channel innovation in these PICs and has effectively brought together various market players to effect last mile outcomes.

Against a target of development of 4 viable business models by March 2019, PFIP -II delivered 1. During the discussion with the Results Management Advisor, it was also noted that PFIP -II has not been able to identify metrics to define the indicator for this particular key performance area. For example, FijiCare, one of the projects that has been reported as a viable business model is a complex case since the government mandate to include civil servants and social welfare recipients has affected the commercial viability of the model. Though the portfolio targeting the farmers remains profitable, the portfolio with civil servants and social welfare recipients has been incurring losses. FijiCare in consultation with the Government is trying to limit the deficits by restricting the definition of dependents and it is yet to be seen how the viability of the model is affected once the proposed changes are applied.

 


Tag: Business Model Innovation Partnership Service delivery National Institutions Private Sector

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4.3.2.1. Delivery and effectiveness of non-financial services

PFIP -II employed a multi-pronged approach to deliver financial education across the PICs. It made a concerted effort to integrate a consumer empowerment focus in most of its grants under the Financial Innovation workstream. Also, it led to integration of Financial Education into the educational curriculum in 3 of PICs. In total, PFIP-II supported 4 FinEd projects across Fiji, SOI and PNG. In Fiji, it adopted a national approach and supported the integration of Financial Education in the school curriculum. Under the sub-national approach, it targeted youth at Technical and Vocational Education and Training (TVET) Institutes in PNG and SOI for the integration of Financial Education into the course curriculum. The FinEd project in Fiji under PFIP-II was highly effective in adapting to the changed situation, building capacities, monitoring results, and eventually successfully handing over the project to the Ministry of Education. The project effectiveness was also demonstrated through the assessment of the pilot that covered 1,400 students. 28 The assessment showed that students were generally well versed with the key concepts of financial education and were responding well to the curriculum. The evaluation team found the course content and activities under the curriculum to be engaging, which was also acknowledged by the school teachers leading to a demand for refresher courses. PFIP supported the piloting of TVET initiatives in SOI and PNG which were further scaled-up at the regional level. These interventions, timed well for youth that are about to enter the workforce are deemed relevant to their lifecycle needs in the immediate future and the high acceptance by participants as well as the implementing agencies alike shows the effectiveness of these projects.


Tag: Effectiveness Ownership Education Financial Inclusion Capacity Building Youth

25.

The effectiveness of customer education under financial innovation grants under PFIP -II was found not commensurate with the programme’s ambition when compared to other consumer empowerment initiatives. In most of the cases, the PADs included a component of customer education but lacked quantifiable performance indicators. KIIs with FSPs and review of operational approach did not show any evidence of dedicated efforts to build consumer capacities to take informed financial decisions barring product marketing. Overall, the effectiveness of PFIP -II was high for the Financial Education projects across the 3 countries – Fiji, SOI and PNG. Integration of financial education into the national curriculum in Fiji can be classified as highly effective and has a far-reaching impact. The sub-national approach in PNG and SOI also demonstrates high effectiveness with immediate impact. Effectiveness of customer education initiatives within the Financial Innovation grants was mostly limited and is highlighted by findings from FGDs across the 4 countries in the respective country reports.


Tag: Effectiveness Innovation Results-Based Management Education Financial Inclusion Capacity Building

26.

4.3.2.2. Linkages of FSPs with informal savings groups

PFIP -II supported an initiative with Savings Groups through World Vision in SOI. Under this pilot, World Vision formed a total of 73 new savings clubs covering a total of 1,825 members of which about 55% were women, all unbanked. However, after the successful completion of the pilot, the project correctly did not take the next step to scale-up, since the cost-benefit analysis showed that the impact of the project at client level was not commensurate with the investment required in terms of funding (cost of pilot was USD 250,000 for the beneficiary count of 1,825 clients taking the per client cost to USD 137 vis a vis programme average of USD 19.829.


Tag: Gender Parity Financial Inclusion Jobs and Livelihoods Micro-credit

27.

4.3.3. Responsible financial services

UNCDF integrated Client Protection Principles (CPP) in all the grant agreements as a standard clause and encouraged its partners to endorse the CPPs. However, it is difficult for the evaluators to assess how rigorously the FSPs followed the client protection principles on the ground. The evaluators found the detail of product feature disclosure to be different across partners. For example, Interest calculation for savings product such as youSave also followed CPPs. Products such as bundled insurance and BIMA insurance product had a grievance redressal mechanism and information about the same was part of the marketing collaterals. However, FGDs in Vanuatu also showed clients registering their grievance for the lack of transparency in the way banks like NBV communicate about product and transaction pricing. Overall, there is little evidence of partner level disclosure on their adherence to responsible finance practices and the evaluation did not find evidence to support implementation of CPP on ground.


Tag: Anti-corruption Communication Policies & Procedures Service delivery Financial Inclusion Private Sector

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4.3.4. Cross-Cutting Issues

4.3.4.1 Integration of Gender

PFIP -II adopted a gendered approach during the implementation phase and aimed to strengthen partner capacities in reaching out to and serving women through i) Research/Technical Assistance, ii) integrating PBA targets in terms gender disaggregated reporting, iii) ensuring that the partners develop strategies to reach out to women and iv) continued monitoring of gender targets and advising FSPs on achievement of the same. The demand side survey across PICs (excluding PNG) was effective in estimating the gender gap in access to financial services in individual countries and provided the baseline for measuring the progress. Furthermore, it further helped the NFIS for respective countries to develop quantifiable gender-specific targets. While evaluating integration of gender by the programme, it is important to ascertain the development of gender-sensitive / transformative products or services and engagement with partners having a women-focused mission. Evaluators didn’t find any evidence of the development of such products or services under PFIP –II. However, PFIP -II did engage with multiple women-focused organizations such as WMBL, SPBD, World Vision across the programme countries albeit through a regular product suite Channel of delivery, especially as innovated by WMBL has helped solve for access barriers for women which is a positive step towards improving usage and adoption of financial products by women. A country-specific assessment using the PoWER30 toolkit was conducted in SOI and PNG to understand the barriers faced by women in accessing financial services. By the end of June 2019, the results were not yet disseminated among the programme partners and hence the insights could not be applied to the innovation projects.


Tag: Gender Parity Women's Empowerment Innovation Monitoring and Evaluation Results-Based Management Service delivery Financial Inclusion

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4.3.4.2. Effectiveness of Knowledge Management

Overall, PFIP -II was highly effective in utilizing its knowledge management function to drive intention to action. DSS, Micro-pension research, development of resource books under FinEd initiatives, savings club manual and focus note on financial products and services are examples of knowledge products as tools for deepening understanding of low-income population across the PICs in a bid to innovate relevant and effective solutions. At the other end of project implementation, PFIP -II commissioned an Impact Pathways study in Fiji, SOI and PNG for stakeholders to gain a better understanding of how access to financial services leads to the building of overall household level in education, health besides just economic outcomes. Similarly, the micro-pension reports have helped uncover opportunities and barriers to comprehensive pension coverage expansion to the informal sector where most providers have only been focusing on providing such services to salaried workers till date. A significant gap, however, is that the knowledge management efforts did not focus on creating institutional memory for project setbacks and failures, internal and external factors affecting thereof and strategic changes required going forward. The evaluation team finds this to be a risk area as unexpected transitions in management and leadership within PFIP may derail the repository of information and knowledge necessary for the programme effectiveness. All these knowledge products have made a significant contribution to expanding financial services amongst low-income households in PICs and contributed to the development of an ecosystem for financial inclusion. Stakeholders across the domains – public & private sector, policymakers and regulators appreciated the contribution of PFIP -II in the field of knowledge management.


Tag: Effectiveness Health Sector Knowledge management Service delivery Education Financial Inclusion Poverty Alleviation

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4.3.5. Market demonstration effect

PFIP- II has had a limited market demonstration effect to date in terms of influencing other FSPs in the programme countries to adopt targeting low-income households and develop custom products/ channels for them. Across the programme countries, mainstream FSPs37 have been circumspect about the commercial viability of products/ services targeting the low-income segment. The evaluation team didn’t find any evidence yet of a crowding-in effect in these countries. All the countries continue to operate with a small number of market players, and in many cases, their numbers have even shrunk. For e.g. BIMA closed businesses in Fiji and PNG, ANZ Bank has reduced its number of branches in SOI. MNOs generally shied away from getting into the mobile money market as the perceived ROI is low and break-even period is longer38. Hence, they have looked up to PFIP for support as a way to manage/ avert risk. PFIP-II’s demonstration effect at policy level can be classified as highly effective as it played a central role in the policy landscape across the programme countries. Similarly, consumer empowerment initiatives have found endorsement among relevant stakeholders like the government with commitment to replicate the model. NFIS prioritized consumer education through the formation of focused working groups on Consumer Empowerment/ Financial Education and setting quantifiable targets for increasing financial literacy in the programme countries. These working groups focus on consumer empowerment measures within the country and bring together FSPs, policymakers, regulators and donor agencies for policy discussions and channel efforts on consumer empowerment. In SOI, the provision of equalisation fund39 for the airtime pilot project has been made with that spirit. Once successful, it is expected that the government may waive off the service tax on airtime to be used for savings and payments.


Tag: Business Model Risk Management Service delivery Country Government Education Financial Inclusion Poverty Alleviation Coordination Policy Advisory

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4.3.6. Up-scaling and replication

At the wider sectoral level, owing to flexible programme design and active management by UNCDF, PFIP -II successfully engaged with the market. This had a demonstration effect on other developmental organisations working on the issue of financial inclusion. IFC’s work in PNG and ADB’s work in SOI are some such examples. PFIP -II implementation experience was also instrumental in providing feedback on market response to new product/ services and policy reforms. It is creating and opening up investment avenues for donors in the field of microfinance, SME finance, branchless banking etc. In this regard, it is noteworthy to mention that PFIP -II has certainly enhanced UNCDF’s comparative advantage and positioning within the area of financial inclusion and digital finance in the region.


Tag: Sustainability Programme/Project Design Project and Programme management UN Agencies Financial Inclusion Technology Policy Advisory

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4.4 Impact

EQ 5 - To what extent is the programme on track to contribute to improved access to financial products and services for low-income rural populations?

  • PFIP II has made significant contribution to changes observed in consumer level awareness, access and usage of financial services. Awareness of financial products remains low. Though there is access to bank accounts, usage and frequency of usage is low. There is a significant difference between men and women in both awareness and usage except for awareness around DBTs and Pensions, in which women demonstrate higher level of awareness.
  • PFIP II has used innovative models to reach out to the last mile clients. However, these models are only moderately successful in impacting outreach and uptake of financial services by low income segments, particularly in rural areas.
  • Market level outcomes for policy and regulation workstream of PFIP-II such as NFIS can be directly attributed to the programme that has led to formalisation and overall market development of financial services sector in the PICs.
  • Consumer empowerment initiatives show a moderate impact on the awareness levels of clients, as only some of the initiatives have scaled across the PICs.
  • Some projects, like BIMA also have had unintended impacts both on the market ecosystem and end consumers. Projects like Fiji care also had unintended positive impact in facilitating regional expansion and adoption by the government.
  • Projects directly responding to consumer needs such as energy solutions in off-grid areas, products/ channels tailored for specific value chains have the potential of higher impact than general mass market products.

Tag: Energy Impact Innovation Service delivery Financial Inclusion Poverty Alleviation Awareness raising

33.

4.4.1. Impact of financial and non-financial services at macro, meso and micro levels of the ecosystem

At the outset, it is pertinent to recognise that the financial services market in the four countries that formed part of the evaluation are at different stages of growth albeit defined by some common challenges explained in detail in the introductory chapters of this report. However, each country is also different in terms of the stage of market development, especially with respect to financial services. For example, countries like Vanuatu are at fairly nascent stage with their first ever National Financial Inclusion Strategy launched only in 2018.

The impact of PFIP II in developing the market ecosystem for financial services has to be seen through different stages of the results chain. At the output level, the programme has been extremely successful in ensuring that each focus country has a NFIS in place that provides a structured policy pathway towards determined financial inclusion goals. This is attributable to PFIP II, with part of the attribution also shared with Phase I of the programme which first supported NFIS development for SOI, Fiji and PNG. An immediate outcome of the NFIS was the institutionalisation of National Financial Inclusion Task Force and working groups to steer policy, implementation and for ensuring due attention to different strands of financial inclusion work. These are also largely attributable to PFIP II that helped the central banks structure these groups through the NFIS. PFIP is also an active participant in implementation of the strategy in PICs. The NFIS at the policy level and NFITs and working groups to steer the implementation of the financial inclusion strategy has led to endorsement of financial inclusion as a key contributor to the overall economic growth of the respective countries by the national governments and development agencies alike. This has created further interest in private sector players who are increasingly seeing a better policy-level architecture to support their venture into servicing rural, low-income pacific islanders from the informal sector. This has been further bolstered by PFIP II through various studies/ TA inputs such as review of the insurance Act, drafting Consumer Credit Act in Fiji, Regulatory guidelines for Microbanks in PNG, Insurance Act in SOI and Mid Term Reviews of NFIS in both SOI and PNG.


Tag: Impact Implementation Modality Service delivery Strategic Positioning Country Government Financial Inclusion Inclusive economic growth Trade and Development Private Sector

34.

The Policy and Regulation workstream effectively supported the development of a financial inclusion ecosystem in PICs. In order to foster innovation and to increase risk appetites of the market ecosystem, PFIP-II has also put in concerted efforts to curate the concept of regulatory sandbox, thus allowing for regulators and practitioners alike to test new technology and solutions to deliver financial services and products outside the ambit of regulatory constraints. Some components of a wellrounded financial inclusion ecosystem that PFIP -II did not focus on at policy and regulation level included remittances and microcredit, both of which have a high need in the region.

PFIP -II effectively promoted digital financial services in PICs through its intervention under the policy and regulation workstream and has worked on this across both macro and meso levels. Evidence of such collaboration was found across the countries.: 1) In Fiji, through PFIP-II’s work on digitising payments and dialogue with key ministries led to G2P and P2G payments to become a priority for “Digital Fiji” , 2) In SOI, it supported the development of practice guide of Mobile Money wallets and digitised G2P payments through its intervention with IRD, 3) In Vanuatu, it provided TA to NBV to create and implement innovative digital solutions for regional seasonal workers. However, evaluators didn’t find much evidence of work done in PNG at the policy and regulation level to promote or expedite digital financial services. None of the TA provided in PNG were in the domain of digital finance and there was no progress on G2P/P2G payments despite it being a key focus area according to the prodoc. This seemed partly a conscious choice as there were other significant interventions on DFS by other developmental organisations such as IFC in PNG. Nevertheless, absence of G2P/P2G payments in PNG is an area where PFIP should work, especially given the inroads built with practitioners in reaching rural PNG, especially women.


Tag: Rule of law Innovation Partnership Programme/Project Design Financial Inclusion Technology

35.

Further, the knowledge management initiatives by PFIP II led to the recognition of lack of access and usage of financial services as a pertinent development problem. For a region that is otherwise submerged in ‘data darkness’, these studies have been illuminating and provided evidence and a baseline to measure performance of financial services development efforts. These reports have also enabled other stakeholders in the market ecosystem such as IMF, IFC and ADB to align themselves with demand side realities and to accordingly define their engagement with the financial services sector. Overall, PFIP -II was effective in enabling data-based decision making amongst policymakers, regulators and FSPs in the region.


Tag: Knowledge management Service delivery International Financial Institutions Financial Inclusion Policy Advisory Data and Statistics

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4.4.2. Contribution of PFIP-II to build operational models and products for low income markets

Support by PFIP II to financial innovations at the level of FSPs were offered through different operational models to suit the local context, operational model of the partner and the need to integrate digital technology in order to achieve outreach to rural and underserved areas. In pursuit of this, projects under PFIP II have mostly used a hybrid model that deploys technology but is also assisted by a human interface, such as an agent network, to enable customer on-boarding and ongoing engagement to ensure product usage and adoption. This recognizes the low awareness levels of consumers across these markets, a lack of access exacerbated by poor state of infrastructure and connectivity with business centers- especially for the informal sector. For example, the Innovation lab set up by PFIP II for Vodafone- M-Pesa has contributed to the growth in mobile money users for MPesa through an agent network including Mobile Village Agents (MVAs) who are mobile and assist consumers with mobile banking services. Similarly, WMBL in PNG has set up MAPs across 5 locations enabling women to open accounts, transact and access products using biometric authentication. It has greatly reduced the barriers associated with paperwork and KYC requirements that is often a ‘pain point’ for customers, especially women. Similar examples could be seen in contexts like Vanuatu where formal banking services are almost exclusively concentrated in two to three locations across the country. NBV, has launched branchless banking and mobile money services. The services are offered through a network of community agents who reach out to outlying islands with limited digital connectivity to ensure that the digital solutions are complemented by physical touch points. In order to circumvent challenges around physical connectivity and the operational expenses thereof, there are also examples like the airtime project with CBSI in SOI, where consumers can save into their accounts by using airtime on their phones. While the initiative is still at a pilot stage, it is a great example of optimizing consumer use cases for nudging behaviour change that may lead to greater financial resilience through savings. Such business model innovations have also pushed the PFIP partners to look at the informal sector, especially in rural areas as a viable market.


Tag: Rural development Resilience building Women's Empowerment Business Model Innovation Service delivery Financial Inclusion Infrastructure Technology Awareness raising

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However, such operational models often involve synergizing strengths of different supply side actors such as MNOs, banks and agent networks. Projects like BIMA, inspite of achieving significant outreach, fell apart due to the misalignment of expectations between the partners. Projects like MiBank Solar Loan or HFC agency banking in Fiji had inefficiencies such as poor selection of agents and low understanding of use cases amongst agent as well as end consumer. Hence, while some of these models showed great promise in the beginning, there are only a few examples that show long term impact through a sustainable operational model.

Impact is seen as strongest for projects that address the needs of a sector/client segment rather than introducing mass market products and services. Projects like SolaPayGo respond directly to the electricity needs of PNG in a context where 85% of the country is still off-grid. The project, which has yet to start reporting, has showed traction in the field as observed during FGDs with clients who find the product to be of high quality with convenient repayment channel through mobile phone top ups. In addition, it has been especially helpful for women to plan their days better as electricity is now available to them in the evenings as well to complete household chores. Children can study using a reliable source of electricity. Hence, SolaPayGo has the potential to achieve far reaching impact at the household level to improve productivity as well as overall well-being. Other examples of projects that respond directly to a pertinent consumer need and therefore have the potential for deeper impact are the use of M-Pesa towards the disbursement of education scholarship to students attending the three Universities in Fiji and the use of e-transport card for bus fares launched in October 2017 and Land Transport Authority (LTA) for loading of travel cards.


Tag: Energy Challenges Impact Business Model Partnership Programme Synergy Education

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For impact at the end consumer level, the RMF for the programme outlines the results chain leading to the intermediate and long-term outcomes. Overall, the PFIP II programme has had moderate impact to date on customer outreach, product uptake, usage and adoption.40 At a regional level, as per the data collected and validated by the evaluators during the country mission, the programme has achieved 52% of its outreach targets with 779,633 consumers enrolled into formal financial services against a target of 1,500,000. This outreach pertains to consumers who are currently part of the different financial innovation projects commissioned under PFIP II.41 PFIP-II RMF reports a higher outreach figure of 1,463,857 owing to the inclusion of projects like BIMA in PNG and Fiji that achieved significantly high outreach while they were active. However, due to the exit of BIMA from the Pacific region, there is no insight about the current outreach, if any, being managed by the local insurance partner. This development also had an impact on the outreach to women. Calculations by the evaluation team shows the outreach to women at 35% of the total vis a vis the target of 50%. This is a reduction from the 40% outreach to women as reported in the Q1 2019 PFIP report. It should also be noted that gender disaggregated data is not available for some projects such as FinEd Fiji, FInEd SOI and especially Fijicare which has a considerable outreach, therefore the reported outreach to women does not provide an accurate and comprehensive picture.

Usage and usage frequency at 30 days and 90 days are used as indicator for adoption of financial services. At the regional level, according to PFIP-II Q1-2019 monitoring report, the frequency of usage for both time periods stand at 33%42. With only a third of the total outreach using the financial services offered, there is significant room for improvement to ensure a sustained engagement and benefit from the financial product/ service for customers and their households. There have been challenges around partner interest in recognising the low-income segment as a viable and serviceable business segment (WestPac, ANZ SOI). In addition, partner level dynamics have also influenced sustainability of consumer engagement with the product itself (BIMA, ANZ SOI). Such factors, along with capabilities around aligning with the consumer ecosystem, has a major bearing on consumer engagement with products.


Tag: Impact Gender Equality Women's Empowerment Partnership Results-Based Management Data and Statistics

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To triangulate the regional data reported by PFIP II and its partners, the evaluation team also collected data through FGDs and quantitative surveys. FGDs were conducted in all the four countries while the quantitative survey was conducted in two countries- Fiji and PNG.43 All the survey respondents are customers for PFIP II partners (Vodafone, Sugarcane Growers Fund, BIMA, Fijicare, HFC Bank, Westpac, MiBank, TVET PNG). Below are some highlights from the quantitative survey across the two countries and the household areas by rural and urban.

To understand the impact of PFIP initiatives at a client level, data around client awareness and product usage from the quantitative survey collected as part of the evaluation, has been presented in Tables 10 and 11. The evaluation found it challenging to map directly the attribution of consumer level insights to PFIP-II since different aid agencies have been working in the region with a focus on improving financial services. Moreover, there is no project level baseline and endline data that can inform changes attributable to the project. To attempt to rectify this, by gleaning insights from the quantitative and qualitative surveys conducted as part of the evaluation, the following is the evaluators’ attempt to show the degrees of attribution and contribution of consumer level awareness and product uptake, usage to PFIP Phase II projects. To delineate attribution and contribution, the following legends have been used:

  • Attribution to PFIP II
  • Partly attributable to PFIP II
  • Contribution by PFIP II
  • No contribution or attribution

As shown in Table 10, the awareness levels for products like Pension and Insurance have been found to be high among survey respondents. It is important to note that there are very few FSPs reaching out to low income segments and products like bundled insurance products offered by Fijicare and BIMA helped reach first generation users of insurance products among the low income, informal sector. However, in SOI and Vanuatu, the FGD participants, primarily from the informal sector, showed a low awareness of insurance products. For pension, the evaluators do not find the awareness levels attributable to PFIP II since the FNPF product in Fiji did not take off and respondents from PNG, while aware of pension conceptually, have not been offered a pension product through any PFIP supported project. By the time the country mission by the evaluators was completed, NASFUND in PNG was yet to start its operations. The FGDs in SOI and Vanuatu revealed a very high awareness about pension products directly attributable to the outreach efforts made by SINPF and VNPF respectively. Similarly, P2P payments afforded through the various mobile money initiatives under PFIP-II in both Fiji and PNG have a high degree of attribution to PFIP both in terms of awareness and usage. Awareness around credit products is relatively low since only a few FSPs, supported by PFIP, offer credit products.


Tag: Rural Urban Financial Inclusion Awareness raising Data and Statistics

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In terms of consumer empowerment, client surveys across Fiji and PNG showed that only 44% of clients have any knowledge source for financial service and only 46% of clients are aware of any grievance redressal mechanism at the FSPs. Furthermore, only 53% of clients felt confident about comparing different financial products and 81% of the total clients felt choosing between FSPs was a stressful experience. In general, indicators of consumer empowerment fared poorly in rural areas.

Overall, at the client level, changes through the results chain can only be mapped for a very linear pathway due to the paucity of data and absence of in-depth impact studies commissioned either by PFIP or conducted internally for the projects by the partners themselves. There have been attempts to analyse partner level data as reported in the Impact Pathways project conducted jointly by PFIP-II and BFA.44 For example, anonymized data for Vodafone Fijishowed that of the 27% of consumers that were active post registration, 28% did MANAGE (stretch money over a short term), 33% did GET (receive a payment), 35% did PAY (utility payments, P2P) and 36% did PROTECT (retain some money over a period of time) over a one year period. In addition, 88% of active Vodafone PAY users reported that they now have a greater number of people they can ask for emergency funds compared to the number they could ask before they used mobile money. This has helped understand the potential of financial services beyond just immediate use cases to overall impact on financial and overall wellbeing. Evidence for financial services to create one or more development impact(s), especially leading towards, if not the achievement of other SDGs cannot be discounted and should ideally be enabled through effective data collection. Integration of impact assessments and M&E plan at partner level would help programmes like PFIP-Phase II to be able to map the different impact pathways to indicate, even early in the product cycle, how customers are using the service and what benefits they are receiving – critical information for service providers to tweak and adapt their value proposition to low income clients. In this way, it can become a strategic tool for financial institutions to provide their customers with all the benefits that are possible, as well as a tool with which donors supporting those institutions to see where their strategies are paying off. Ultimately, this puts the impact on the customers at the centre of the strategies for both.


Tag: Rural Business Model Knowledge management Monitoring and Evaluation Financial Inclusion Agenda 2030 Data and Statistics

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4.4.3 Unintended Impact

While following the programme performance against the programme design, the evaluation also looked at the unintended impact at the client level. The most important is the impact of withdrawal of BIMA from the Pacific region. The project achieved significant scale in Fiji and PNG with an outreach to 323,314 Pacific islanders of which 51% were women.45 However, because of the sudden exit, consumers holding the insurance policy had little recourse to seek information on how to further engage with the product, claims, renewals, among others. This leads to long term ramifications such as distrust towards the product and channel used since the premiums were paid through Digicel mobile top-ups. The project also had an impact on the market ecosystem for insurance since BIMA was celebrated for its audacious outreach to first generation users of insurance products. As noted in the midterm review of NFIS II for PNG, “uncertainty regarding factors that failed the business model has led to increased risk aversion among other insurance industry players with regards to testing innovative products and delivery channels.”

The evaluators also mapped the unintended impact of management churn within partner organisations on the health of the PFIP supported projects. Examples like Westpac in PNG where the bank had received one of the largest grants made by PFIP Phase II (USD 1.5 million) had to be prematurely terminated due to change in management and the resultant shift in organizational focus.

One of the important positive unintended impact of the programme is the success of Fijicare and how quickly the government adopted the product as part of its welfare offering for employees in the government service. While sustainability of a project is always a desirable outcome, the turnaround for Fijicare was accelerated because of the performance of the product, its reception by end consumers and the sharing of progress made through active communication.


Tag: Challenges Impact Business Model Communication Innovation Programme/Project Design Service delivery Country Government Financial Inclusion

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4.5 Sustainability

EQ 6 - To what extent are the programme results likely to be sustainable?

  • On the policy front, the programme interventions have been found to be highly sustainable through the institutionalization of NFIS in countries where PFIP Phase II is operational
  • On the financial innovation front, the programme shows low sustainability with only about 10% of total projects (Fijicare and SINPF) showcasing any evidence of financial sustainability reached by end of programme. 20% of projects have only been recently commissioned and cannot be evaluated in this area
  • PFIP-II inputs around TA has played a key role in securing buy in from partners and ensuring professional rigor in offering financial services through innovative operational models
  • Consumer empowerment initiatives have been moderately successful overall with high success rates noted for curriculum integration for schools and TVET programmes. Initiatives around embedding consumer education through FSPs are few and far between, thereby discouraging any analysis around the sustainability thereof.

Tag: Sustainability Innovation Education Financial Inclusion Policy Advisory

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Sustainability is concerned with measuring whether the benefits of an activity are likely to continue after donor funding has been withdrawn. Projects need to be environmentally as well as financially sustainable. Given the unique PIC context, not only is achieving sustainability a challenge but predicting growth over the duration of a project is also difficult due to the several externalities weighing upon the success of a project in the region.

On the policy front, PFIP- II has created a strong and sustainable framework to support financial inclusion efforts through the NFIS for five countries. Of these, through PFIP-II, NFIS has been- updated for three countries, launched for the first time in two countries and a comprehensive midterm review has been conducted for NFIS in two countries. Institutionalization of NFITs to support the policy level work and to steer the discussion and implementation in the financial inclusion space has ensured that the guidelines in the strategy are realized into action. Further, domain specific working groups have ensured buy-in from public and private sector entities that have an interest in the financial services sector. Bringing together of stakeholders through these working groups has also given an opportunity to participants to discuss policy level changes that are key to keep the market agile especially in a quest to serve the low-income segments from the informal sector. TA inputs provided under PFIP-II have offered specialized inputs to the efforts that are being made by central banks and other apex institutions to ensure a strong working environment and market ecosystem for financial inclusion. Specific components such as insurance, superannuation funds and entities like microbanks that can drive financial inclusion were supported through technical assistance. For donors like DFAT46, this has also been one of the strongest outcomes of the programme.


Tag: Sustainability Innovation Partnership Country Government Financial Inclusion Institutional Strengthening Policy Advisory Technical Support Private Sector

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4.5.1. FSP sustainability to supply financial services to low income households

On the financial innovation front, the evidence points to moderate performance on the sustainability of the different projects that have been supported under PFIP Phase II. It should be noted that of the 27 projects mapped as per the PFIP Phase II RMF, 20% of the projects have been signed only in 2019 and have not started reporting or have been significantly delayed in starting their operations. Of the remaining 80% of projects, Fijicare in Fiji and SINPF in SOI have shown scale and performance for their projects to be called sustainable. In the case of Fijicare Insurance, the numbers have swelled due to government’s decision to extend coverage to its staff and welfare recipients, however the high pay outs have led to losses in the current year even without taking into account the operational costs to run this scheme. In collaboration with the government, Fiji Care is putting in measures to limit the pay outs by redefining beneficiaries. But it is a work in progress and the current scenario points to sustainability issues in a project that has otherwise generated significant volume of outreach numbers. In the case of SINPF in SOI, the product- YouSave is expected to break even during the 4th year of intervention, and the current uptake of the productis very promising and efforts are on to replicate it in Vanuatu and PNG. Addition of airtime channel for uptake (if implemented) will aid the uptake and shorten the runway to realise the viability period of theproduct. Vodafone M-PESA supported under PFIPI has achieved high scale (339,768) under PFIP-II and is also expanding to three other countries. Further the use of MVAs to deepen outreach in rural areas, first piloted using PFIP-II grant is now being scaled up by Vodafone without any external support. Among some of the newer projects, WMBL in PNG has shown great promise and since the roll out of its MAPs project earlier in 2019, the project has already achieved over 55% of its outreach targets and has mobilised funds commensurate to open up a credit line for its consumers. Similarly, SolaPayGo in PNG has achieved success in rolling out the solar home solution unit and feels confident about breaking even by the second year of its operations at the most.47 Prominent among the remaining partners are Westpac and BIMA (in both Fiji and PNG) that either shut down their operations or could not sustain operations. Agent banking projects, HFC bank in Fiji and Go Money Channel of ANZ Bank in SOI show serious lack of belief in financial sustainability among top management of both banks, casting doubts over their sustainability beyond project phase. Overall, in terms of financial sustainability, most projects have not been able to pass through all the stages of UNCDF’s maturity model at a level of scale that can confidently peg them as long-term sustainable models.


Tag: Challenges Sustainability Business Model Partnership Service delivery Sustainability Country Government Financial Inclusion Poverty Alleviation Private Sector Vulnerable

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4.5.2. Extent of PFIP-II contribution to improve institutional and operational capacities of implementing partners

On the policy front, TA provided towards the drafting of NFIS and the midterm reviews of NFIS in PNG and SOI have been appreciated deeply by the central bank and other stakeholders. These have lent a critical lens through which financial services can be viewed and the progress mapped for each country. The role of TA provided through knowledge products such as Demand Side Surveys have also played a groundbreaking role in establishing baselines for these countries through empirical evidence and has bolstered the efforts to institutionalize measurement frameworks for financial inclusion as a nationwide project.

One of the important inputs provided by PFIP-II is deep technical expertise in the financial services space. TA was provided to many partners through the programme duration to administer the innovation hub for projects, to provide technical guidance to set up digital platforms for consumer engagement and process re-engineering, digitization of systems, use of HCD principles for product and engagement design, among others. The PADs also call for management level recruitments to execute the project requirements and to build institutional experience and knowledge in order to continue the project mandate sustainably even after PFIP’s engagement is concluded. TA support has been one of the strongest offerings by PFIP Phase II and has been appreciated by different groups of stakeholders. On the FSP front, the fintech challenge hosted by PFIP earlier in 2019 has been appreciated by NBV in Vanuatu and KINA bank in PNG for the technical rigor brought in by the fintech companies and the value proposition thereof. Similarly, TA provided by BPPS and Pinbox Solutions through micro-pension studies allowed SINPF in SOI, VNPF in Vanuatu and NASFUND in PNG to align its product offering for the informal and rural sector in a very successful way. PHB Development’s TA to WMBL in PNG allowed for the institutionalization of the MAPs that is already making for a successful story. However, there have also been examples like the case of Westpac in PNG, the conclusion of the TA support provided by a long-term consultant was one of the reasons why the project did not carry on. This has shown that management intent from the partner organization, TA consultant’s ability to mentor, coach and institutionalize technical expertise are some of the important factors determining sustainability of such efforts.


Tag: Sustainability Innovation Ownership Service delivery Financial Inclusion Technology Institutional Strengthening Technical Support Data and Statistics Private Sector

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Further, PFIP-II has fostered an environment for innovation in the sector through concepts such as regulatory sandboxes to enable partners to think out of the box and try solutions to maximize outreach to the last mile consumers. While the ecosystem for experimentation has been afforded through PFIP support, the sustainability of such efforts will show when partners would be empowered with skills to carry on such work on their own merit by actively participating in the market and by continuing to recognize the low-income segments as a viable consumer base. 

For consumer empowerment, TA inputs from BASIX have helped shape the FinED content suited for integration into TVET courses in PNG. Since the TVET programme focuses on improving job readiness of youth through skilling programmes, the juxtaposition of financial education at this important juncture improves the chances of application of knowledge gained in day to day lives as these youth join the workforce. This immediate application to context is an important factor affecting the sustainability of the programme which is now being adopted by different provincial governments in PNG. Similarly, TA received towards content creation for FinED curriculum in SOI and Fiji have been deeply appreciated by stakeholders including school teachers who the evaluation team met with. The sustainability of FinEd work in Fiji is clear with Ministry of Education taking full ownership of the project.

 


Tag: Local Governance Innovation Ownership Education Financial Inclusion Jobs and Livelihoods Awareness raising Youth

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4.5.3. Sustainability of products and services in serving the needs of low-income populations, particularly for women and particularly in rural areas

In terms of financial products and their sustainability in the Pacific context, products and services that respond to immediate need of consumers and enable them to latch on, leads to higher adoption. Successful examples such as SINPF’s youSave product, Vodafone’s Mobile Village Agents allowing for consumers to tap mobile agents, WMBL through their MAPs allowing women microentrepreneurs an easy access to banking services through simple biometric onboarding process, SolaPayGo offering quality energy solutions in off-grid areas are some of the projects that have optimised client needs and have therefore experienced success. Examples like these have shown the formal banking services is not important on its own unless it helps solve a life need such as access to electricity for a population that is primarily off grid. Similarly, savings will only be important if clients know that their money will grow in the bank account or can be leveraged for taking out loans at time of need through easy means. Also, transactions will only be possible if it is meaningfully entwined with the day to day transactions of pacific islanders such as to receive funds for their produce or to pay off vendors or to make utility payments. This is the reason why there is a need to shift to an approach where sector specific solutions are derived that work on optimising forward, backward linkages in a value chain such as cacao, coffee, coconut farming and other relevant agri and non-agri sectors, allowing all actors to engage with the financial products.


Tag: Energy Sustainability Women's Empowerment Service delivery Financial Inclusion Jobs and Livelihoods Poverty Alleviation Value Chain

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4.5.4. Sustainability of consumer empowerment initiatives

The sustainability of the consumer empowerment initiatives can be seen through two lenses. The first is the policy level work to bolster the consumer protection framework and the resultant incorporation of such measures in the implementation practices of the various players in the market. Evidence from secondary literature review shows that integrating consumer protection measures helps build sustainable businesses in the financial services sector.48 While most of the NFIS’s touch upon the need for integrating consumer protection guidelines, there are not many examples of countries with model laws/frameworks that can for a strict adherence and compliance to such guidelines. In Fiji, PFIP-II provided TA to the Ministry of Industry, Trade & Tourism to propose amendments to the Consumer Credit Act but there is no clarity on how strongly will it integrate consumer protection. The other lens for ensuring sustainability is an ‘informed’ engagement of clients with financial services, products and their providers. Most PADs have incorporated a component of consumer education however, the only evidence found in the field, especially through FGDs was of product marketing. The evaluators did not get access to any structured financial education content that the practitioners may be using in the field. Sustainability from the perspective of consumer engagement gets affected in such a case, since consumers have little knowledge about making informed choices (vastly different from getting convinced about a product through a marketing pitch), recourse in case of any bad experiences (instead of becoming dormant and cease to enjoy benefits of the product) and hierarchy for grievance redressal. This is an important gap in the current programme design and should be addressed in the subsequent phases of PFIP.


Tag: Challenges Sustainability Programme/Project Design Country Government Education Trade and Development Policy Advisory

Recommendations
1
2

Evaluation Recommendation or Issue 1:

PFIP Phase II has clearly registered success through the support offered to central banks and national governments in establishing the NFIS and the relevant architecture for steering the policy discourse, including working groups to bring together various strands under financial inclusion.

  1. Data management to guide strategic decisions: KIIs with central bank showed that central banks look to PFIP and its team for technical and management guidance. While multi-stakeholder working groups and their coordination may not be entirely under PFIP’s purview, specific guidance around data management that can help guide discussions more proactively within these groups should definitely be considered as part of the next phase of programme design.
  2. Global technical expertise: The evaluators did not come across very strong evidence in the form of regular, nuanced and credible data that is being reported by central banks on a periodic basis for a standardized list of output, outcomes and impact metrics. PFIP can play a critical role in bringing together global best practices, technical advisory and management experience to ensure that the implementation of NFIS is more nimble and data driven.
  3. Continue to support knowledge products like the Demand Side Surveys that have been singularly responsible for establishing credible baselines for countries where PFIP is operational and for offering valuable insights into the informal sector that still remains a grey area for many FSPs and other stakeholders. The next phase should continue to build this database to drive decision making and relevant intervention design for low income segments, particularly in rural areas and especially for women.
3

Evaluation Recommendation or Issue 2:

Bringing payments system to the centre stage: Digital payments and building the ecosystem to support it was one of the key areas of intervention for PFIP- II but not many initiatives have been taken up in this space. It is an important use case in the PICs where technology driven platforms to facilitate transactions can potentially address challenges around geographical dispersion, high operational costs and low quality of infrastructure, among others. Global examples from countries like India have shown that driving the payments ecosystem creates immediate use case and helps onboard consumers to use digital financial services. Developing the payments ecosystem in a context like the Pacific region could be a significant nudge in the direction of creating use cases that will drive access to adoption. The next phase of PFIP should bring the payments ecosystem to the centre stage of its work as one of its key domain areas.

 


 

4

Evaluation Recommendation or Issue 3:

Contextualise agency banking for PICs: Regulations allowing banks and nonbank e-money issuers to appoint agents have been in place for a decade in quite a few countries. These regulations were often inspired by Brazil’s experience dating back as far as the 1970s. In 2006, for example, India first adopted its “business correspondent” (agent) regulations. However, in the PICs, there is still a lot of uncertainty around the selection of agents, criteria thereof, the infrastructure pre-requisites, accountability matrix to consumers, de-risking cash management, especially in countries like PNG where security is an issue. Among the PICs, Fiji has an Agent Banking Guideline that it introduced in 2013, but it has not been updated since and provides very generic guidelines around agent selection and transactions allowed through branchless banking. PFIP’s next phase could focus on studying lessons from some of these global practices around agency banking regulations and help central banks contextualize it for the PICs.

 


 

5

Evaluation Recommendation or Issue 4:

Recommendation to deep dive into sectors, products and channels identified through PFIP-II: The Financial Innovation workstream under PFIP II focused on many products with the focus primarily being on savings through access to bank accounts, pension and insurance through branchless banking, mobile money and agent networks as the popular engagement channels. Projects using PAYG models to access solar energy products, particularly home solutions have also been offered through the programme. Lessons drawn from the programme till date, should drive the PFIP team to realign the key product/service domains for the subsequent phase of the programme to focus efforts on where inputs are required the most. Domains such as the following should be clearly delineated with adequate focus provided for each. For example,

  1. For insurance and pension products, the programme should focus on regional expansion using successful examples (Fijicare, SINPF) and drive factors to ensure long term sustainability of these programmes.
  2. Domains such as energy financing, climate resilience financing should be enabled within the PFIP management to align with needs of the PIC context and to bring in more professional rigor and accountability for the results realized through such project commissions both from the PFIP and the partner management perspective.
  3. Credit has clearly emerged as an urgent domain for PFIP to focus on, especially from consumers as a stakeholder group that continue to reach out to informal sources that are exploitative albeit convenient, to access credit. All countries in the PICs exhibit severe deficiencies in the credit market – be it microfinance or small enterprise financing. It is suggested that within the well-suited Digital strategy, PFIP-III should focus on expanding credit outreach- which will have a multiplier effect on payments and insurance.
  4. Domain for channel innovation that can look at increasingly agile ways to facilitate the reach and adoption of financial services. This often requires collaboration between multiple entities such as MNOs, FSPs, commercial banks, white label agent/infrastructure solutions that has been enabled for different projects in the current programme phase. Examples such as CBSI pilot project to use airtime for payments and savings is one such project that shows the efforts put in by PFIP and its partners to create innovative, consumer centric service. However, as also observed through other projects such as HFC, Westpac, more rigor needs to be brought in to detect early on during project implementation about channels that do not work and the possible alternatives that can be plugged in suited to the environment within which consumers, especially those from low income segments and especially women, exist.
  5. Digitization of G2P payments will also feed into agency banking volumes and should be a focus area for the subsequent phases of PFIP. There is also support and collaboration available in this space due to the work taken up by other development agencies such as IFC and can be leveraged to drive ecosystem level changes that will ultimately help drive better use cases for last mile consumers.
  6. SMEs are clearly a focus for most national governments that PFIP engages with. SME guidelines/policies also focus primarily on agri value chains that primarily employ the low-income informal sector- the key outreach for PFIP projects. Hence, it would merit to enable SME financing as a key domain area under the subsequent phases of PFIP.
  7. The remittance sector remains underserved in spite of migration being a key feature defining the economies of various PICs, - both at intra and inter country levels especially where seasonal workers are a significant constituent of the demography. Insights gathered through FGDs show that recipients of remittances still travel large and inconvenient distances to access funds.

 


 

6

Evaluation Recommendation or Issue 5:

Setting up agency banking for success: Agency banking remains a highly debatable area in the PICs with no distinct model showcasing a sustainability in the long run. However, it is also one of the few engagement channels that can help onboard low income, rural consumers on digital platforms using a human interface. In spite of the model currently not yielding results, it is a necessary recourse. PFIP should focus on setting up this model for success especially by ensuring there is enough agility and use case in the forward, backward linkages wherein such agent networks are plugged in.

7

Evaluation Recommendation or Issue 6:

Bringing gender centerstage through focused implementation designed to further financial inclusion for women: Gender remains an area of great concern since PFIP Phase II clearly mentioned outreach to women as a key focus area in line with UNCDF’s policy around addressing   and human rights through all of its programmes. However, the means to achieve the purported end remains extremely vague for the programme with reporting gender disaggregated data being the only indicator that is somewhat reported against. Apart from projects like SPBD in SOI and WMBL in PNG that happen to focus entirely on women, there are no other instances where a gender focus can be observed. Using available tools like the PoWER diagnostic studies for SOI and PNG under the supervision of a dedicated gender expert, strategies and implementation design for gender focus programming for PFIP-III should be an urgent priority.

8

Evaluation Recommendation or Issue 7:

Recommendation to build a stronger accountability framework for implementation partners: While the risk associated with partnerships under the financial innovation workstream is acknowledged and documented even, the PADs do not offer insight into why projects are commissioned to some partners over others. PFIP management has mentioned in the past about paucity of enough viable players in the market which dissuades the usual EOI route that most UNCDF projects adopt. However, it is important that stronger accountability features are built into PBAs and PADs for ensuring the partners remain equally responsible for the envisaged results. Convenience cannot be the only prerequisite guiding decisions around partnership, as made evident through many cases in the current programme cycle.

9

Evaluation Recommendation or Issue 8:

Recommendation to compare programme costs with peers to streamline budgetary allocations: On budget management, the evaluators noted that the total implementation support costs of PFIP administration/operations of 21%. This 21% is comprised of i) indirect costs (8% for ‘facilities and admin’) in the programme document that covers the required UNCDF’s general management services costs and also ii) direct costs (13%) for the running of the programme in the Pacific. While the evaluators note the ‘curse of lack of economies of scale’ in the Pacific that lead to higher transportation and logistics costs’(p.25), it is recommended that the programme should monitor these costs relative to other development agencies with programming covering multiple countries operating in the Pacific to ensure that PFIP is in line with peers.  It is also recommended that PFIP keep a clearer breakdown of direct administrative costs and TA provided to the workstreams by PFIP staff to clearly show what are the Pacific related costs.

10

Evaluation Recommendation or Issue 9:

Replicate and scale FinEd initiatives to other PICs: The FinEd integration into mainstream education curriculum in schools in Fiji and SOI has been appreciated widely by different stakeholders. Similarly, the TVET project in PNG helps prepare the youth that is on the verge of joining the workforce in making sound financial choices from the beginning of their careers. The spillover effects of such initiatives also cannot be discounted because of the household level changes that can be powered by children and youth who are exposed to such FinED courses. KIIs with Central Banks also shows that consumer empowerment is one of the most prominent areas where they see PFIP playing a role going forward. As part of its regional expansion plans, it would merit PFIP to scale such efforts across the different countries where it is operational as part of its subsequent programme phase.

11

Evaluation Recommendation or Issue 10:

Strengthen integration of consumer awareness initiatives in innovation projects: Consumer level FGDs conducted by evaluators found very low levels of awareness among last mile consumers about different financial products. Bank accounts is now common knowledge, but the access that it creates for consumers to build a history with the financial institution thereby creating further access to more products, especially credit, is not very commonly known. There is also a bigger focus by partner institutions to mobilize savings and discourage too many withdrawals often creating a perception of money getting ‘locked’ or ‘trapped’ in a bank account. In addition, most PADs have embedded consumer education as part of the partner deliverables, but very little evidence has been found in the field about concerted efforts made in offering streamlined financial education except for a few instances of marketing collateral in the form of brochures etc. The gap further widens in the absence of any measurement of consumer education initiatives at the partner level or by PFIP as part of its RMF. For an area of intervention which is a key workstream, there is very little evidence available to map the results chain and show the outcomes thereof at partner or programme level. The next phase of PFIP should add some key indicators to measure outcomes of consumer education initiatives.

12

Evaluation Recommendation or Issue 11:

Drive compliance to consumer protection framework as an industry practice across PICs: Consumer protection is still work in progress in PICs with some countries like PNG having made some headway by drafting Financial Consumer Protection guidelines that are currently under review.  Full disclosure of products, their pricing and breakup of costs to customers are key elements that have been found to be missing for partners like SolaPayGo in PNG, NBV in Vanuatu, however well-intentioned their motives may be. This also includes means and methods of grievance redressal for customers should there be any complaints. Examples such as the BIMA project in Fiji and PNG that had a high outreach to low income customers, provided no avenues for customers to report back post BIMA’s exit wherein an independent agency or even stakeholders like PFIP could record, collect and analyse customer reactions for further action. It is therefore recommended that PFIP’s next phase should focus not only on strengthening the ratification of consumer protection guidelines at a policy level but also offer assistance in creating reporting and compliance level framework and operational models.

13

Evaluation Recommendation or Issue 12:

Recalibrate the Knowledge Management function and the reporting formats thereof: The difference between knowledge management and communications should not be blurred. While communications should focus on publishing PFIP work and achievements as well as supporting programme partners through communication collaterals, KM has to focus on distilling best practices across projects documenting key metrices of success under varied projects. At the moment, the Knowledge Management initiatives have not been found to be commensurate with the quantum of work that has been done by PFIP Phase II and the institutional experience gained thereof. KIIs with key donors have also pointed to the gaps in establishing outcomes and impact of the programme through the reports that are shared with them. It is recommended that PFIP should focus on recalibrating its reporting format to donors and other key stakeholders to include outcome and impact metrics to showcase the accomplishments of different projects, lessons learnt thereof. As shared by donors, bringing out such clarity in reporting will further help in building a case for future funding for PFIP in the region.

Build basic evaluation metrics for innovation projects with reporting accountability held by implementation partners: Knowledge and data management needs to be strengthened for sharing lessons and knowledge transfer. Projects executed by PFIP II in PNG offer rich experience in processes, systems, project management and overall outcomes and impact through varying degrees of success. However, it is not easy to map these experiences, lessons learnt thereof, application to other project contexts and wider sharing among stakeholders and across the region. For example, the lessons from BIMA in Fiji, PNG, Westpac in PNG are important to be documented and are being sought out by stakeholders like DFAT and EU. The next phase of PFIP should also encourage partners to collect baseline and endline data for simple but relevant metrics. At the moment it is not easy to glean any client level behavioural change leading to adoption of financial services that can be attributed to the programme, simply because of lack of such data. Further, as a validation measure, PFIP should also look to commission more impact studies that not only validates outputs for different projects, but also map outcomes and impact to inform stakeholders of behaviour change among consumers that may lead to adoption of financial services and engagement channels (especially digital) in the long run.

14

Evaluation Recommendation or Issue 13:

Strengthen field monitoring by country staff: Further to the recommendation around improving data collection from partners, there is also a need for PFIP teams to strengthen their field monitoring for verifying progress and reporting key highlights and observations in quarterly reports instead of simply accepting self-reported data from partners as the final data for programme reporting.

Management Response Documents
1. Recommendation:
Management Response: [Added: 2020/03/05]

Overall comments:

PFIP considers this final evaluation as a positive evaluation, which highlights the contributions of the programme team and reflecting the impact the programme has had on various levels in the Pacific markets. The programme management believes the conclusions and the recommendations provided are in line with the strategic orientation of UNCDF and as such has already taken steps to implement many of them, either under PFIP-II’s remaining time left, or is incorporating these within the new programme proposals that are currently under development.

Key Actions:

2. Recommendation:

Evaluation Recommendation or Issue 1:

PFIP Phase II has clearly registered success through the support offered to central banks and national governments in establishing the NFIS and the relevant architecture for steering the policy discourse, including working groups to bring together various strands under financial inclusion.

  1. Data management to guide strategic decisions: KIIs with central bank showed that central banks look to PFIP and its team for technical and management guidance. While multi-stakeholder working groups and their coordination may not be entirely under PFIP’s purview, specific guidance around data management that can help guide discussions more proactively within these groups should definitely be considered as part of the next phase of programme design.
  2. Global technical expertise: The evaluators did not come across very strong evidence in the form of regular, nuanced and credible data that is being reported by central banks on a periodic basis for a standardized list of output, outcomes and impact metrics. PFIP can play a critical role in bringing together global best practices, technical advisory and management experience to ensure that the implementation of NFIS is more nimble and data driven.
  3. Continue to support knowledge products like the Demand Side Surveys that have been singularly responsible for establishing credible baselines for countries where PFIP is operational and for offering valuable insights into the informal sector that still remains a grey area for many FSPs and other stakeholders. The next phase should continue to build this database to drive decision making and relevant intervention design for low income segments, particularly in rural areas and especially for women.
Management Response: [Added: 2020/03/05] [Last Updated: 2021/01/26]

Agree with the recommendation.

 

Financial Inclusion data collection and reporting has been a challenge faced by all regional Central Banks. PFIP II started addressing this challenge with technical assistance to Central Bank of Solomon Islands, Central Bank of Samoa and Reserve bank of Vanuatu by developing a common generic reporting template to track key indicators aligned to their National Financial Inclusion Strategies, and it assisted the Central Banks in conducting workshops with reporting FSPs. More recently Reserve Bank of Fiji has requested support from PFIP and AFI for another DSS, which is foreseen to take place in 2020. Despite these various types of support from PFIP and other development partners standardization of output, outcomes and impact metrics remains a challenge in the region.

Going forward, under the Pacific Digital Economy Programme (PDEP), one of PFIP’s successor programmes, which will focus on the Pacific digital economy, the management aims to put extra focus on supporting the statistics bureaus and central banks in the region to strengthen the capacity of national statistical systems to produce better, more reliable statistics that are internationally comparable. To this extend it seeks to partner with UNCTAD, which is leading the global efforts standardize measuring and data collection for the digital economy.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
1.1. Organize second Demand Side Survey in Fiji by Reserve Bank of Fiji and Fiji Bureau of Statistics with TA support from PFIP
[Added: 2020/03/05] [Last Updated: 2021/03/18]
PFIP 2021/03 Completed This work has started in March 2020 and has been finalized now. RBF is currently finalizing this work for publication. History
1.2 Partnership agreement signed between UNCDF and UNCTAD, which covers support to statistics bureaus and central banks as part of PFIP’s successor programme focusing on Pacific digital economy
[Added: 2020/03/05] [Last Updated: 2021/03/18]
PFIP 2021/03 Completed Joint programme document for the Pacific Digital Economy Programme has been signed by three agencies UNCDF, UNCTAD and UNDP. History
3. Recommendation:

Evaluation Recommendation or Issue 2:

Bringing payments system to the centre stage: Digital payments and building the ecosystem to support it was one of the key areas of intervention for PFIP- II but not many initiatives have been taken up in this space. It is an important use case in the PICs where technology driven platforms to facilitate transactions can potentially address challenges around geographical dispersion, high operational costs and low quality of infrastructure, among others. Global examples from countries like India have shown that driving the payments ecosystem creates immediate use case and helps onboard consumers to use digital financial services. Developing the payments ecosystem in a context like the Pacific region could be a significant nudge in the direction of creating use cases that will drive access to adoption. The next phase of PFIP should bring the payments ecosystem to the centre stage of its work as one of its key domain areas.

 


 

Management Response: [Added: 2020/03/05] [Last Updated: 2021/01/26]

Agree with the recommendation.

 

The payment ecosystem in the Pacific remains under-developed as compared to other regions in the world and except for PNG, which has only recently launched their REPS payments system, no country in the Pacific has yet deployed fully interoperable payment systems. The World Bank group, in partnership with the Central Banks in the region, has been leading the work in establishing inter-operability and national payment switches. This is still work in progress and present timelines indicate at least 2 to 3 more years for this to be fully completed across the bigger countries in the region. Given that the World Bank group is leading this area of work, PFIP management has been of the opinion that its role should be restricted to advocacy, facilitating partnerships and providing direct support to private sector Financial Service Providers, such as MNOs and banks to develop and launch their own payment services and where possible support interoperability between FSP’s, or use alternative digital platforms to facilitate low value retail payments, such as the use of mobile airtime credits in Solomon Islands. Where possible support could be provided to those partner FSP’s to connect to payments systems as established by the World Bank Group and the central banks across the region. However, this is still not feasible as these have not been commissioned yet, or as in the case of PNG, are in very early stage.

 

The management acknowledges the need for more emphasis in this area and to that extend this topic will receive specific attention through a dedicated workstream (Open Digital Payment Ecosystem) under the Pacific Digital Economy Programme, one of PFIP’s successor programmes. Activities proposed under this workstream will seek to complement the work of other development partners, such as the World Bank group and will specifically focus on interventions in digital payments that can unlock the Pacific digital economy, such as ‘open banking’ platforms and e-commerce payments aggregation.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
2.1. Market assessment study for regional payments aggregation and Open Banking to support a digital economy in the Pacific
[Added: 2020/03/05] [Last Updated: 2021/03/18]
PFIP 2021/03 Completed Study finished and final report received from consultants at end of Feb 2021. History
4. Recommendation:

Evaluation Recommendation or Issue 3:

Contextualise agency banking for PICs: Regulations allowing banks and nonbank e-money issuers to appoint agents have been in place for a decade in quite a few countries. These regulations were often inspired by Brazil’s experience dating back as far as the 1970s. In 2006, for example, India first adopted its “business correspondent” (agent) regulations. However, in the PICs, there is still a lot of uncertainty around the selection of agents, criteria thereof, the infrastructure pre-requisites, accountability matrix to consumers, de-risking cash management, especially in countries like PNG where security is an issue. Among the PICs, Fiji has an Agent Banking Guideline that it introduced in 2013, but it has not been updated since and provides very generic guidelines around agent selection and transactions allowed through branchless banking. PFIP’s next phase could focus on studying lessons from some of these global practices around agency banking regulations and help central banks contextualize it for the PICs.

 


 

Management Response: [Added: 2020/03/05] [Last Updated: 2021/01/26]

Agree with the recommendation.

The management acknowledges the need for more support to central banks in this area and to that extend in 2019 it has at the request of the Central Bank of Solomon Islands (CBSI), already done an assessment on the feasibility for an interoperable shared agency network platform (One liquidity, one agent interface), to be utilized by traditional and non-traditional financial service provider. In 2020 this will be followed with additional TA for CBSI to conduct a technology assessments/system audits and prepare technical design elements of the shared agency banking service in Solomon Islands.

Additionally, it will develop a KM product to document lessons learned from PFIP’s existing initiatives, looking at the market constraints of PIC versus global best practices around agency banking.

Furthermore, this topic will receive specific attention through activities in a dedicated workstream (Enabling Policy and Regulatory Environment) under the Pacific Digital Economy Programme, one of PFIP’s successor programmes. These activities proposed under this workstream will seek to “support capacity building of policy makers and regulators and assist in review and amendments of policies and regulations affecting the Digital Economy”.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
3.1 Conduct a technology assessment/system audit and prepare technical design of shared agency banking network for CBSI in Solomon Islands.
[Added: 2020/03/05] [Last Updated: 2020/09/16]
PFIP 2020/09 Completed Done and shared with CBSI History
3.2 Develop a KM product with lessons learned from PFIP’s existing initiatives on agency banking, looking at the market constraints of PIC versus global best practices around agency banking.
[Added: 2020/03/05] [Last Updated: 2021/03/18]
PFIP 2021/03 Completed Report published in Feb 2021: https://www.uncdf.org/article/6527/viability-of-mass-market-digital-finance-in-the-pacific History
3.3 Partnership agreement signed between UNCDF and UNCTAD, which covers capacity building of policy makers and regulators and assist in review and amendments of policies and regulations affecting the Digital Economy.
[Added: 2020/03/05] [Last Updated: 2021/03/18]
PFIP 2021/03 Completed Joint programme document for the Pacific Digital Economy Programme has been signed by three agencies UNCDF, UNCTAD and UNDP. History
5. Recommendation:

Evaluation Recommendation or Issue 4:

Recommendation to deep dive into sectors, products and channels identified through PFIP-II: The Financial Innovation workstream under PFIP II focused on many products with the focus primarily being on savings through access to bank accounts, pension and insurance through branchless banking, mobile money and agent networks as the popular engagement channels. Projects using PAYG models to access solar energy products, particularly home solutions have also been offered through the programme. Lessons drawn from the programme till date, should drive the PFIP team to realign the key product/service domains for the subsequent phase of the programme to focus efforts on where inputs are required the most. Domains such as the following should be clearly delineated with adequate focus provided for each. For example,

  1. For insurance and pension products, the programme should focus on regional expansion using successful examples (Fijicare, SINPF) and drive factors to ensure long term sustainability of these programmes.
  2. Domains such as energy financing, climate resilience financing should be enabled within the PFIP management to align with needs of the PIC context and to bring in more professional rigor and accountability for the results realized through such project commissions both from the PFIP and the partner management perspective.
  3. Credit has clearly emerged as an urgent domain for PFIP to focus on, especially from consumers as a stakeholder group that continue to reach out to informal sources that are exploitative albeit convenient, to access credit. All countries in the PICs exhibit severe deficiencies in the credit market – be it microfinance or small enterprise financing. It is suggested that within the well-suited Digital strategy, PFIP-III should focus on expanding credit outreach- which will have a multiplier effect on payments and insurance.
  4. Domain for channel innovation that can look at increasingly agile ways to facilitate the reach and adoption of financial services. This often requires collaboration between multiple entities such as MNOs, FSPs, commercial banks, white label agent/infrastructure solutions that has been enabled for different projects in the current programme phase. Examples such as CBSI pilot project to use airtime for payments and savings is one such project that shows the efforts put in by PFIP and its partners to create innovative, consumer centric service. However, as also observed through other projects such as HFC, Westpac, more rigor needs to be brought in to detect early on during project implementation about channels that do not work and the possible alternatives that can be plugged in suited to the environment within which consumers, especially those from low income segments and especially women, exist.
  5. Digitization of G2P payments will also feed into agency banking volumes and should be a focus area for the subsequent phases of PFIP. There is also support and collaboration available in this space due to the work taken up by other development agencies such as IFC and can be leveraged to drive ecosystem level changes that will ultimately help drive better use cases for last mile consumers.
  6. SMEs are clearly a focus for most national governments that PFIP engages with. SME guidelines/policies also focus primarily on agri value chains that primarily employ the low-income informal sector- the key outreach for PFIP projects. Hence, it would merit to enable SME financing as a key domain area under the subsequent phases of PFIP.
  7. The remittance sector remains underserved in spite of migration being a key feature defining the economies of various PICs, - both at intra and inter country levels especially where seasonal workers are a significant constituent of the demography. Insights gathered through FGDs show that recipients of remittances still travel large and inconvenient distances to access funds.

 


 

Management Response: [Added: 2020/03/05] [Last Updated: 2021/01/26]

Agree with the recommendations (more detail can be found in the attached PDF Management Response)

Key Actions:

Key Action Responsible DueDate Status Comments Documents
4.8 Regional scoping study for partner organization to collaborate with existing co-working spaces and innovation hubs across the Pacific to develop incubation and/or acceleration programmes for Pacific MSME’s (both established and start-up) to acquire the right skills for e-commerce, digital marketing etc.
[Added: 2020/03/05] [Last Updated: 2020/12/08]
PFIP 2021/06 Initiated Delayed due to delayed funding commitment from DFAT for PDEP. New due date June 2021 History
4.1 VNPF to launch copy of SINPF’s youSave product and pilot in Vanuatu.
[Added: 2020/03/05]
PFIP 2020/02 Completed Pilot launched by VNPF
4.2 FijiCare to open office in Solomon Islands and launch bundled micro-insurance in Vanuatu
[Added: 2020/03/05] [Last Updated: 2020/12/08]
PFIP 2020/12 Completed FijiCare has requested Central Bank of Solomon Islands for approval. Microinsurance has been launched by VanCare, FijiCare’s subsidiary in Vanuatu. Additionally FijiCare has expanded its microinsurance product offering into Kiribati as well through a partnership with PFIP and the Kiribati Insurance Corporation. History
4.3 LIC/UCPNG to launch pilot on micro-insurance product in Papua New Guinea
[Added: 2020/03/05] [Last Updated: 2020/07/06]
PFIP 2020/06 Completed Completed History
4.5 Sign agreement with MCII to develop new programme proposal addressing disaster risk management, disaster risk financing and insurance
[Added: 2020/03/05] [Last Updated: 2020/09/16]
PFIP 2020/09 Completed Done and new programme has been PAC approved History
4.6 Market assessment study for regional payments aggregation and Open Banking to support a digital economy in the Pacific (=copy action 2.1)
[Added: 2020/03/05] [Last Updated: 2021/03/18]
PFIP 2021/03 Completed Study finished and final report received from consultants at end of Feb 2021 History
4.9 Launch International Money Transfer Hub with Vodafone Fiji.
[Added: 2020/03/05] [Last Updated: 2020/12/08]
PFIP 2020/12 Completed Integration with WorldRemit (HomeSend), Rocket Remit, RIA and Western Union. The IMT is currently being connected to Vodafone’s other subsidiaries in the region, e.g. in Vanuatu (former TVL), Samoa (former BlueSky) where Rocket Remit has already connected with the M-Tala wallet. History
4.10 Recruit MSME and blended finance specialist
[Added: 2020/03/05] [Last Updated: 2020/12/08]
PFIP 2020/12 No Longer Applicable [Justification: Canceled, as the resources available under the new successor programme (Pacific Digital Economy Programme) are insufficient for this new role to be created. ]
History
4.4 Support the scaling of at least one of PFIP’s existing off-grid energy solution partners into another Pacific country through TA or financial support, or a combination of both.
[Added: 2020/03/05]
PFIP 2021/06 Not Initiated PFIP looking to support SolaPayGo from PNG to enter SOI market
4.7 Regional scoping study on opportunities for eGovernment initiatives and potential links to G2P/P2G payments
[Added: 2020/03/05] [Last Updated: 2020/12/08]
PFIP 2021/06 Not Initiated Delayed due to delayed funding commitment from DFAT for PDEP. New due date June 2021 History
6. Recommendation:

Evaluation Recommendation or Issue 5:

Setting up agency banking for success: Agency banking remains a highly debatable area in the PICs with no distinct model showcasing a sustainability in the long run. However, it is also one of the few engagement channels that can help onboard low income, rural consumers on digital platforms using a human interface. In spite of the model currently not yielding results, it is a necessary recourse. PFIP should focus on setting up this model for success especially by ensuring there is enough agility and use case in the forward, backward linkages wherein such agent networks are plugged in.

Management Response: [Added: 2020/03/05] [Last Updated: 2021/01/26]

Agree with the recommendation

 

PFIP II did initial exploration of establishing sector specific agency networks, for example through the ANZ goMoney project in Solomon Islands and connecting these with specific agricultural value chains, such as the coconut value chain. Additionally, the ongoing project in PNG with Mi-Bank will pilot three distinct agency models with a view to establishing critical success factors that will feed into the scale up and replication with other partners.

 

The PFIP management believes that for the financial sustainability of agency banking solutions, a shared last mile infrastructure is a stronger enabler for the development of a healthy digital economy with sustainable competition on services delivered at the last mile. Therefore, in 2019 it has done an assessment on the feasibility for an interoperable shared agency network platform in Solomon Islands. In 2020 this will be followed with additional TA for CBSI to conduct a technology assessments/system audits and prepare technical design elements of the shared agency banking service in Solomon Islands. PFIP successor program PDEP will have specific activities under the Open Digital Payments Ecosystem workstream, which seek to establish shared last mile infrastructure.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
5.1 Conduct a technology assessment/system audit and prepare technical design of shared agency banking network for CBSI in Solomon Islands. (= copy 3.1)
[Added: 2020/03/05] [Last Updated: 2020/09/16]
PFIP 2020/09 Completed Done and shared with CBSI. History
5.2 Develop a KM product with lessons learned from PFIP’s existing initiatives on agency banking, looking at the market constraints of PIC versus global best practices around agency banking. (= copy 3.2)
[Added: 2020/03/05] [Last Updated: 2021/03/18]
PFIP 2021/03 Completed Report published in Feb 2021: https://www.uncdf.org/article/6527/viability-of-mass-market-digital-finance-in-the-pacific History
7. Recommendation:

Evaluation Recommendation or Issue 6:

Bringing gender centerstage through focused implementation designed to further financial inclusion for women: Gender remains an area of great concern since PFIP Phase II clearly mentioned outreach to women as a key focus area in line with UNCDF’s policy around addressing   and human rights through all of its programmes. However, the means to achieve the purported end remains extremely vague for the programme with reporting gender disaggregated data being the only indicator that is somewhat reported against. Apart from projects like SPBD in SOI and WMBL in PNG that happen to focus entirely on women, there are no other instances where a gender focus can be observed. Using available tools like the PoWER diagnostic studies for SOI and PNG under the supervision of a dedicated gender expert, strategies and implementation design for gender focus programming for PFIP-III should be an urgent priority.

Management Response: [Added: 2020/03/05] [Last Updated: 2021/01/26]

Partially agree with the recommendation.

 

The PFIP management acknowledges that the programme has not lived up to its expectations with respect to the mainstreaming of gender within its projects. Besides data collection on gender outreach, which has proven to be a significant challenge in its own right for the PFIP team, a more specific gender strategy, focused on the impact on the economic and social well-being of women and girls using Human Centred Design will be incorporated in both of PFIP’s successor programmes; PDEP and PICAP. For that reason a Gender and Social Inclusion Specialist will be recruited to ensure that the impact of the programme interventions on women and girls is consistently considered at project design phases and throughout the implementation cycle

Key Actions:

Key Action Responsible DueDate Status Comments Documents
6.1 Recruitment of Gender and Social Inclusion Specialist to support both of PFIP’s successor programmes
[Added: 2020/03/05] [Last Updated: 2020/12/08]
PFIP 2020/12 No Longer Applicable [Justification: Canceled, as the resources available under the new successor programmes are insufficient for this new role to be created. ]
History
6.2 Develop strategy on gender focus programming for both of PFIP’s successor programmes
[Added: 2020/03/05]
PFIP 2021/06 Not Initiated Dependency on action 6.1
8. Recommendation:

Evaluation Recommendation or Issue 7:

Recommendation to build a stronger accountability framework for implementation partners: While the risk associated with partnerships under the financial innovation workstream is acknowledged and documented even, the PADs do not offer insight into why projects are commissioned to some partners over others. PFIP management has mentioned in the past about paucity of enough viable players in the market which dissuades the usual EOI route that most UNCDF projects adopt. However, it is important that stronger accountability features are built into PBAs and PADs for ensuring the partners remain equally responsible for the envisaged results. Convenience cannot be the only prerequisite guiding decisions around partnership, as made evident through many cases in the current programme cycle.

Management Response: [Added: 2020/03/05] [Last Updated: 2021/01/26]

Partially agree

The challenge of limited financial service providers in the Pacific has been a significant problem under both phases of PFIP. Especially if one has to seek for viable partners amongst these that have a genuine appetite for more risk to innovate.

Under both phases of PFIP the management has used the Support Facility Policy, which specifically caters for a Standing Expression of Interest, which has been published on the PFIP website to guide potential partners wanting to present a proposal for PFIP funding. The same policy provided for unsolicited proposals, and allowed for proactively encouragement of potential partners to present proposals.

What is more, with current trends in the markets, where even in the bigger Pacific markets, established commercial banks, such as ANZ are completely turning their back on the retail market. This will make the pool of potential partners even smaller. For exactly that reason it started the Financial Innovation Challenge early 2019; to connect with FinTech innovators from Malaysia, Singapore, Australia and New Zealand and de-risk their entry into the Pacific. This is just one way how PFIP management believes it has adapted to the realities of the Pacific market and looked into innovative ways of seeking new partners for its programme.

Going forward and using the experience from both phases of PFIP as well as from UNCDF’s experience in other markets, an updated and well-documented, transparent partner selection process will be developed and which will be part of the new Investment Committee policy and governance framework for both of PFIP successor programmes; PDEP and PICAP.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
7.1 Develop updated partner selection process as part of the IC policy and governance framework for both PFIP successor programmes
[Added: 2020/03/05] [Last Updated: 2021/03/18]
UNCDF FIPA 2021/03 Completed Successor programmes are using RfA process to source and select partners. In PNG – EU STREIT programme has started its RfA in Q4 2020. PICAP started its RfA in Jan 2021 and PDEP will start RfA in May 2021. History
9. Recommendation:

Evaluation Recommendation or Issue 8:

Recommendation to compare programme costs with peers to streamline budgetary allocations: On budget management, the evaluators noted that the total implementation support costs of PFIP administration/operations of 21%. This 21% is comprised of i) indirect costs (8% for ‘facilities and admin’) in the programme document that covers the required UNCDF’s general management services costs and also ii) direct costs (13%) for the running of the programme in the Pacific. While the evaluators note the ‘curse of lack of economies of scale’ in the Pacific that lead to higher transportation and logistics costs’(p.25), it is recommended that the programme should monitor these costs relative to other development agencies with programming covering multiple countries operating in the Pacific to ensure that PFIP is in line with peers.  It is also recommended that PFIP keep a clearer breakdown of direct administrative costs and TA provided to the workstreams by PFIP staff to clearly show what are the Pacific related costs.

Management Response: [Added: 2020/03/05] [Last Updated: 2021/01/26]

Agree with the recommendations.

 

This is noted for guidance on the development of our successor programmes. Although this means potential changes to our accounting practices and coding in the ATLAS system for cost allocation, this will be factored and undertaken in the successor programmes.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
8.1 Develop guidance for cost allocation with a clearer focus on separation of administrative costs versus TA provided by expert/specialist programme staff
[Added: 2020/03/05] [Last Updated: 2021/03/18]
UNCDF FIPA 2021/06 Initiated Pending. New due date end Q2 2021 History
10. Recommendation:

Evaluation Recommendation or Issue 9:

Replicate and scale FinEd initiatives to other PICs: The FinEd integration into mainstream education curriculum in schools in Fiji and SOI has been appreciated widely by different stakeholders. Similarly, the TVET project in PNG helps prepare the youth that is on the verge of joining the workforce in making sound financial choices from the beginning of their careers. The spillover effects of such initiatives also cannot be discounted because of the household level changes that can be powered by children and youth who are exposed to such FinED courses. KIIs with Central Banks also shows that consumer empowerment is one of the most prominent areas where they see PFIP playing a role going forward. As part of its regional expansion plans, it would merit PFIP to scale such efforts across the different countries where it is operational as part of its subsequent programme phase.

Management Response: [Added: 2020/03/05] [Last Updated: 2021/01/26]

Agree with the recommendations.

The FinEd interventions of PFIP are now recognized as a best practice and we have received requests from the Pacific and beyond. PFIP has supported ADB in 2019 with a scoping mission to integrate financial literacy into the school curriculum in Nauru and recently it has approached PFIP to expand this partnership and include other Pacific Island Countries, such as RMI.

The recent partnership agreement with Australia-Pacific Training Cooperation (APTC) is one such example where it will see the incorporation of FinEd in all the skills development courses offered by APTC, including its labour mobility scheme students. Another example is the partnership with Catalpa International to digitize the content of the financial literacy training to be able to offer it beyond the current Rural Technical Colleges that PFIP works with in Solomon Islands. These initiatives are aimed to have long-term sustainable impact on Pacific households and improve their personal money management.

Also other development partners have requested support from PFIP on this particular area to replicate FinEd into the national curriculum. have requested regions and countries that recently have requested for PFIP’s expertise and support in this area through the respective UNCDF offices in these countries (for example in Bangladesh and Senegal). Similarly

Within the Empowered Consumers workstream of PDEP, the PFIP management is planning to continue to engage national and sub-national stakeholders in progressing FinEd, both through formal school curriculum, university and TVET institutions. Moreover, it seeks to extend the scope to include digital literacy and other specific topics relevant for the development of a digital economy.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
9.1 Partnership with Catalpa International to digitize the content of PFIP’s financial literacy training and pilot in Solomon Islands
[Added: 2020/03/05]
PFIP 2020/01 Completed LoE signed and pilot ongoing in SOI
9.2 Partnership with Australia-Pacific Training Cooperation (APTC) to incorporate FinEd in all the skills development courses offered by APTC, including its labour mobility scheme students.
[Added: 2020/03/05]
PFIP 2019/12 Completed LoE signed and curriculum development ongoing
9.3 Partnership with ADB to support ADB with integration of FinEd in national curricula in countries beyond PFIP scope.
[Added: 2020/03/05] [Last Updated: 2020/07/06]
PFIP 2020/06 No Longer Applicable [Justification: ADB will be doing this autonomously]
History
11. Recommendation:

Evaluation Recommendation or Issue 10:

Strengthen integration of consumer awareness initiatives in innovation projects: Consumer level FGDs conducted by evaluators found very low levels of awareness among last mile consumers about different financial products. Bank accounts is now common knowledge, but the access that it creates for consumers to build a history with the financial institution thereby creating further access to more products, especially credit, is not very commonly known. There is also a bigger focus by partner institutions to mobilize savings and discourage too many withdrawals often creating a perception of money getting ‘locked’ or ‘trapped’ in a bank account. In addition, most PADs have embedded consumer education as part of the partner deliverables, but very little evidence has been found in the field about concerted efforts made in offering streamlined financial education except for a few instances of marketing collateral in the form of brochures etc. The gap further widens in the absence of any measurement of consumer education initiatives at the partner level or by PFIP as part of its RMF. For an area of intervention which is a key workstream, there is very little evidence available to map the results chain and show the outcomes thereof at partner or programme level. The next phase of PFIP should add some key indicators to measure outcomes of consumer education initiatives.

Management Response: [Added: 2020/03/05] [Last Updated: 2021/01/26]

Agree with the recommendations.

 

Low levels of awareness and knowledge on financial services remains an issue in the Pacific and this is perhaps reflected in the low uptake of some of the services developed under PFIP II. For this reason, this will be specifically addressed in the RMF linked to a dedicated group of activities under the Consumer Empowerment workstream, which both of PFIP’s successor programmes (PDEP and PICAP) will have.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
10.1 Map results chain and update PAD template to include specific indicators for partners to measure outcome of consumer education initiatives under PFIP’s successor programmes.
[Added: 2020/03/05] [Last Updated: 2021/03/18]
PFIP 2021/06 Not Initiated Pending. New due date end Q2 2021 History
12. Recommendation:

Evaluation Recommendation or Issue 11:

Drive compliance to consumer protection framework as an industry practice across PICs: Consumer protection is still work in progress in PICs with some countries like PNG having made some headway by drafting Financial Consumer Protection guidelines that are currently under review.  Full disclosure of products, their pricing and breakup of costs to customers are key elements that have been found to be missing for partners like SolaPayGo in PNG, NBV in Vanuatu, however well-intentioned their motives may be. This also includes means and methods of grievance redressal for customers should there be any complaints. Examples such as the BIMA project in Fiji and PNG that had a high outreach to low income customers, provided no avenues for customers to report back post BIMA’s exit wherein an independent agency or even stakeholders like PFIP could record, collect and analyse customer reactions for further action. It is therefore recommended that PFIP’s next phase should focus not only on strengthening the ratification of consumer protection guidelines at a policy level but also offer assistance in creating reporting and compliance level framework and operational models.

Management Response: [Added: 2020/03/05] [Last Updated: 2021/01/26]

Agree with the recommendations.

Pacific countries and its regulators have nascent consumer protection frameworks. A very common challenge is that some of the financial service providers, such as microfinance institutions are not regulated and therefore out of the ambit of the Central Banks. Multiplicity of supervisory agencies also lead to confusing situations in terms of responsibility and accountability (for example in Fiji there is the Consumer Council, the Fiji Consumer and Commerce Commission as well as the Reserve Bank).

The PFIP management recognizes that there still is a lot of work to be done in the area of consumer protection, whilst some efforts are already underway. However, under the Consumer Empowerment workstream of PDEP, the successor program of PFIP focused on the digital economy, specific activities are planned to support the development and implementation of consumer protection and data privacy policies and regulations.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
11.1 Conduct gap analysis on consumer protection and data privacy policies and regulations with focus on reporting capacity and compliance monitoring.
[Added: 2020/03/05] [Last Updated: 2020/12/08]
PFIP 2021/06 Not Initiated This is in scope of the successor programme of PFIP, the Pacific Digital Economy Programme (under activity 1.4: Support capacity building of policy makers and regulators and assist in review, amendments and implementation of policies and regulations affecting the Digital Economy). Delayed due to delayed funding commitment from DFAT for PDEP. New due date June 2021. History
13. Recommendation:

Evaluation Recommendation or Issue 12:

Recalibrate the Knowledge Management function and the reporting formats thereof: The difference between knowledge management and communications should not be blurred. While communications should focus on publishing PFIP work and achievements as well as supporting programme partners through communication collaterals, KM has to focus on distilling best practices across projects documenting key metrices of success under varied projects. At the moment, the Knowledge Management initiatives have not been found to be commensurate with the quantum of work that has been done by PFIP Phase II and the institutional experience gained thereof. KIIs with key donors have also pointed to the gaps in establishing outcomes and impact of the programme through the reports that are shared with them. It is recommended that PFIP should focus on recalibrating its reporting format to donors and other key stakeholders to include outcome and impact metrics to showcase the accomplishments of different projects, lessons learnt thereof. As shared by donors, bringing out such clarity in reporting will further help in building a case for future funding for PFIP in the region.

Build basic evaluation metrics for innovation projects with reporting accountability held by implementation partners: Knowledge and data management needs to be strengthened for sharing lessons and knowledge transfer. Projects executed by PFIP II in PNG offer rich experience in processes, systems, project management and overall outcomes and impact through varying degrees of success. However, it is not easy to map these experiences, lessons learnt thereof, application to other project contexts and wider sharing among stakeholders and across the region. For example, the lessons from BIMA in Fiji, PNG, Westpac in PNG are important to be documented and are being sought out by stakeholders like DFAT and EU. The next phase of PFIP should also encourage partners to collect baseline and endline data for simple but relevant metrics. At the moment it is not easy to glean any client level behavioural change leading to adoption of financial services that can be attributed to the programme, simply because of lack of such data. Further, as a validation measure, PFIP should also look to commission more impact studies that not only validates outputs for different projects, but also map outcomes and impact to inform stakeholders of behaviour change among consumers that may lead to adoption of financial services and engagement channels (especially digital) in the long run.

Management Response: [Added: 2020/03/05] [Last Updated: 2021/01/26]

Agree with the recommendations.

On the KM function and reporting formats: The PFIP Management has the ambition to incorporate the learnings from its current programme into the development of its successor programmes. This has been the main driver to schedule the final evaluation of the current phase of PFIP earlier than originally anticipated. Therefore, it acknowledges the recommendation to recalibrate reporting format to the Investment Committee and donors and for that reason this will be re-designed for the successor programmes.

Furthermore, specifically for the purpose of deriving important learnings from the projects currently ongoing, and which are about to finish as part of the current phase of PFIP, a new project closure report has been developed, which is focusing specifically on learnings from the projects, and which is currently being implemented. These lessons will be collected and incorporated into an end of programme report which will highlight the most important lessons for the successor programmes.

On evaluation metrics for innovation projects with reporting accountability held by implementation partners: As already mentioned under point 1 of the recommendations, data collection and reporting on financial inclusion has been a significant challenge faced by PFIP, as well as many regional Central Banks. This equally applies to our implementation partners and is not something unique to PFIP as the management has been made aware that similar challenges exist in some of the other UNCDF programmes.

To get more insights into client level behavioural change related to adoption of financial services and that can be attributed to the programme, as well as impact studies PFIP has invested significant resources in innovative research on exactly these topics through its Impact Pathways initiative. This initiative has also been adopted by UNCDF colleagues in Zambia and has attracted significant attention from the development practitioners working on financial inclusion. A popular blog post and associated focus note on Impact Pathways were recently voted as “Most influential article of 2019” on the Next Billion forum website, a platform for discussion of business ideas and innovations that address poverty-related challenges and reshape entire economies, and is an initiative from the William Davidson Institute at the University of Michigan.

In 2020, PFIP, together with colleagues from UNCDF Zambia, will publish additional Knowledge Management publications on Impact Pathways, more specifically a focus note, an associated blog, 4 explainer tools (one for each partner organization working with us on this initiative) and an updated toolkit. Furthermore, under one of PFIP’s successor programmes, which will focus on the Pacific digital economy, the management aims to do a continuous impact assessment to measure and track the level of inclusiveness of digital economies at country level through the use of UNCDF’s Inclusive Digital Economy Scorecard (IDES), which will create the necessary indicators for inclusiveness to be embedded into the National Digital Economy Strategies.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
12.2 Redesign project closure report for currently ongoing PFIP projects and publish an end-of-programme report with consolidated lessons learned from the innovation projec
[Added: 2020/03/05] [Last Updated: 2020/12/08]
PFIP 2021/06 Initiated PFIP received a no cost extension till end of June 2021. New due date for end-of-programme report is June 2021. History
12.3 Publish additional KM products on Impact Pathways; a focus note, an associated blog, 4 explainer tools and an updated toolkit
[Added: 2020/03/05] [Last Updated: 2020/09/16]
PFIP 2020/09 Completed Done and published on special website: https://www.uncdf.org/impact-pathways/home History
12.4 Include the use of UNCDF’s Inclusive Digital Economy Scorecard (IDES) into PFIP’s successor programme
[Added: 2020/03/05] [Last Updated: 2020/09/16]
PFIP 2020/07 Completed Done and is incorporated in the Prodoc for the Pacific Digital Economy Programme. The PFIP team has already worked with Government of Solomon Islands, who have endorsed the tool and are now one of the four IDES pilot countries together with Uganda, Benin and Nepal, as is also mentioned here: https://ides.uncdf.org/homepage History
12.1 Redesign reporting format to include specifically outcome and impact metrics for the Investment Committee and donors from PFIP’s successor programmes.
[Added: 2020/03/05] [Last Updated: 2021/03/18]
PFIP 2021/09 Not Initiated Pending. New due date end Q3 2021 History
14. Recommendation:

Evaluation Recommendation or Issue 13:

Strengthen field monitoring by country staff: Further to the recommendation around improving data collection from partners, there is also a need for PFIP teams to strengthen their field monitoring for verifying progress and reporting key highlights and observations in quarterly reports instead of simply accepting self-reported data from partners as the final data for programme reporting.

Management Response: [Added: 2020/03/05] [Last Updated: 2021/01/26]

Agree with the recommendations.

The PFIP management believes that this issue has its roots in weak enforcement of project governance principles that should stipulate regular reporting that is underpinned by clear demarcation of responsibilities and accountabilities between PFIP staff in country and the regional office, as well as its partners.

For PFIP’s successor programmes, the project governance framework will have to be reviewed and updated with a specific focus on practicalities to turn project governance from “on paper” into reality. Furthermore, programme staff will need to be upskilled regarding project governance and more importantly, the implementation thereof.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
13.1 Review and update project governance frameworks for successor programmes
[Added: 2020/03/05] [Last Updated: 2021/03/18]
PFIP 2021/09 Not Initiated Pending. New due date end Q3 2021 History
13.2 Training of programme staff on practical implementation of project governance principles
[Added: 2020/03/05] [Last Updated: 2021/03/18]
PFIP 2021/06 Not Initiated Pending. New due date end Q2 2021 History

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