From pigs to piggy banks…financial empowerment, Solomon Islands style.

From pigs to piggy banks…financial empowerment, Solomon Islands style.

By Nirri Shah, Good Return’s Asia Pacific Financial Capability Manager

With a population of around 800,000, people spread over 1,000 islands and speaking over 70 languages, Solomon Islands is home to some of the most remote communities on earth. The challenges of geography and underdevelopment have contributed to the country being among the least developed in the Pacific region and the poorest in the world.

Evidence of financial inclusion development challenges can be seen in the latest data from a report prepared by the United Nations Capital Development Fund (UNCDF)*. The report shows that more than half the adult population (55%) in Solomon Islands are “unbanked” i.e. they do not have a bank account or access to digital financial services. This problem disproportionately impacts women, meaning they cannot access secure and safe financial facilities, limiting their ability to grow savings, track money and build businesses to support livelihoods.

From L to R: Catherine Alo (President Gumu Savings Club & Mothers Union Leader), myself (Nirri) and Linda Folia (Manager National Financial Inclusion, Central Bank of Solomon Islands)

As Good Return’s Asia Pacific Financial Capability (CAFE) Program Manager, I recently conducted a field visit to the Solomon Islands to meet our local team, to visit existing and potential partners, and to hear from our Consumer Awareness and Financial Empowerment (CAFE) coaches and learners across rural communities in Guadalcanal, Central Islands and Malaita provinces. We discussed how we can broaden and further serve communities to tackle the inclusion issues faced in the country, through strategic partnerships. I also heard directly from women entrepreneurs managing Micro, Small and Medium Sized Enterprises (MSMEs) about the very real barriers faced, and how they have used our CAFE program to improve their families and community’s lives. 

Women’s Savings Group attending CAFE training

Typically, our learners are subsistence and small-scale farmers, growing produce such as chickens, fish, and different root vegetables such as cassava, potatoes, taro, pana and yam. Interestingly, the women don’t recognise that they are running a business, they believe they are just growers. Our CAFE program helps them to take control of their own financial wellbeing by slowly shifting their behaviours to more of an entrepreneurial mindset. It provides them with tools and skills to better manage their finances at home and in their business, giving them greater confidence in their abilities, no matter the size of their business.

So what are the barriers to high engagement with the financial sector?

There are multiple reasons for the low level of financial inclusion in the Solomon Islands, namely:

• Remoteness and geographical spread of much of the population, with poor infrastructure and a limited road network, making transportation expensive

• Lack of banks located in the provinces, which means individuals have to travel for hours to even open a bank account

• Very low levels of financial and digital literacy

• Lack of legal identification documents required to open a bank account

• Limited access to smartphones, insufficient network coverage, lack of/very expensive internet, and a lack of access and understanding of digital banking services available

These barriers are even more pronounced for rural communities and women due to economic, social and cultural reasons. In many cases, people have to travel considerable distances to reach a bank or ATM, which makes it time-consuming, expensive, and ultimately not possible. While mobile phone penetration in Solomon Islands is relatively high, only just over half* have a smartphone. Additionally, the lack of internet access in villages means individuals have to walk vast distances to find a mobile network or are required to use satellite services which are cost prohibitive to the majority of the population. 

To make matters worse, financial institutions have less appetite to serve rural areas due to the high cost and low returns. There have been some key players that are committed to providing digital financial services to rural communities, but the costs associated with raising awareness and helping to increase adoption remains a major obstacle. The recent report conducted by the UNCDF shines a light on the challenges faced by Solomon Islanders. The findings in this first-of-its-kind report are a great step and will hopefully drive further involvement and collaboration between development agencies to enable sustainable change in the region.   

So how does the market economy function in the Solomon Islands?

Women’s Savings Group in Guadalcanal village

The way in which many of our learners conduct their business is cash based and transactional. There are no co-operatives or wholesale businesses available in these remote areas for the producers to sell their produce to, so it is up to the women to sell them directly to the end customer. Due to the remoteness of the villages, selling produce often means that the women need to hire boats themselves and carry heavy bags to reach the markets on nearby islands. This is both expensive and inefficient and there can sometimes be unavoidable delays due to such things as poor weather or lack of available boats. When this happens, the produce often spoils, leaving them penniless. Additionally, due to lack of capital, the women generally spend what they earn on a daily basis, restricting their ability to grow their businesses. 

With more than 50% of the adult population without a bank account, the majority of Solomon Islanders rely on informal methods for everyday savings and borrowing. This includes community-based savings groups and clubs. The Ministry of Women, Youth, Children and Family Affairs (MWYCFA) were the first to formalise the structure of women's savings groups. MWYCFA visits communities and provides a four-day training program on how to organise the savings groups, encouraging the women to start saving. Typically, savings groups are run by the members themselves, with clear roles for the president, treasurer, teller etc. Village communities typically have a central meeting area where the savings groups meet weekly or fortnightly to “deposit” their fund contributions into locked boxes (pictured here), a more formal version of a piggy bank that is shared by all the members in the group. Generally, there are two distinct funds and at least three different locked boxes - daily spending, medium term savings and saving for emergencies. Members can save what makes sense for them personally and can withdraw savings when they need it or when their goal is reached. A beautiful part of the system is that the savings are pooled to support community-wide initiatives and to provide loans to members when they need it the most, for example when there is a loss in the family or if someone is sick.

What impact has the CAFÉ program had on Solomon Island learners

Good Return began financial literacy training in the Solomon Islands in 2019, in partnership with the Central Bank of Solomon Islands (CBSI), to support their National Financial Inclusion strategy (link here). 

Through our partnership with the Central Bank, we have been able to build a network of partners, including the Ministry of Women, and many grassroots organisations. After the Ministry of Women formalises savings groups, coaches trained by Good Return then deliver face-to-face CAFE training to the members of the savings groups. Since we began, we have trained over 65,000 women and low income community members across Asia Pacific. During my field trip I visited some of the villages where CAFE had been delivered, including Gualdalcanal, two rural communities within the Central Province (Tulagi, and Gumu Village), and Malaita. To reach Gumu village in the Central Province we left Honiara at 6am to spend three hours on a boat, then trekked one hour to the village, through dense jungle and multiple barefoot river crossings! 

Walking through the jungle

The many women that I met personally during my visit shared stories of the confidence they gained from the CAFE program. When I asked Catherine Alo, a CAFE coach and leader of the Women's Savings group in the Gumu Village, about why she started a savings club, Catherine said “she felt the need to support these women that were juggling so many things - from having enough food to feed their children, to teaching their extended family the importance of education, and simply being confident that they are being a good mother!” Catherine’s savings club now has around 100 women members, with each of them saving approximately $2,000SBD each month (approx. A$350), an incredible achievement. She spoke about how they have used the savings to build a “market house” to store and sell produce they have grown, which reduces spoiling and waste. They are now saving to buy a wash tank facility for the community.

Catherine Alo

One learner told me “The training has given me so many ideas, new thoughts - how much I’m selling, spending and buying. I have been able to grow my business from a street market stall to a canteen thanks to this opportunity”. Another learner said that she had never considered saving before the training, she explained that if there was a family emergency in the past, they usually couldn’t afford to travel to be with them, but now they save a little bit of money each week and are better prepared for financial shocks. 

The other interesting change shared was how there had been a shift in the cultural norms in the village. Traditionally, men were seen as the breadwinners and money managers, however, we are now seeing an open dialogue between the husband and wife about what they want to save for, how much they will both need to contribute to meet their expenditure, as well as a better overall awareness of saving within the family. One said “I am talking to my family, teaching my sons and sisters. They are now saving money, which was never thought about before.“ Another shared “my husband used to spend money on many things. I never made any money decisions, I now handle all of the money decisions at home and my husband is supportive as he can see the impact of saving money”. 

Part of my visit included being part of a beautiful graduation ceremony in Tulagi and seeing CAFE being delivered in Malaita. There I heard many other stories of women who had either started a business, grew their businesses, saved more money for their children's education, or started managing their household expenses. These were traditionally things that were only done by the males in the household. Hearing directly from the women is one of my favourite parts of my job. 

And then there was a pig!

Little did I know that I was about to receive a gift from the Gumu community - a pig! And it wasn’t just a small pig, it had been fed for months by the village community chief who was so appreciative of the difference Good Return’s education program had made in the community. I was humbled to receive such a generous gift on behalf of Good Return.

So, what did I do with this pig??? We decided to transport the gift back to Honiara on our little boat, through growing waves and large currents.

What does the future look like…

Solomon Islands is a priority for Australia given our focus on the Pacific in our International Development Policy. It is also an important part of Good Return’s work in the region. 

We will continue to work with our strategic partners across the Pacific to support financial inclusion and gender equality in the region. In the Solomon Islands, we will continue to work with the Central Bank and the Ministry of Women with an aim to expand our reach to all nine provinces to make lasting change.

* Data sourced from: https://www.uncdf.org/article/8476/assessing-digital-and-financial-literacy-in-solomon-islands

Good Return’s CAFE Initiative is delivered in partnership with the Australian Government through the Australian NGO Cooperation Program (ANCP).

Nirri Shah, Asia Pacific Financial Capability Manager, Good Return

Nirri leads Good Return’s flagship financial capability programs across eight countries in Asia Pacific. With a passion for gender inclusion, Nirri’s career in International Development builds on years of experience as a Management Consultant at global consulting firms including Accenture and Deloitte. Her expertise spans social and financial inclusion, sustainability and community development, strategy consulting, education, and organisational transformations. Nirri also served as the Convenor of the Gender Equality Committee and was part of the Executive Board at the United Nations Association of Australia, where she implemented various community initiatives to progress SDG 5.