LocationsSolomon Islands to Count With New Digital Economic Tools Targeting Informal Economy Players
March 30, 2024
Signatories with UNDP, ILO and MCILI representatives
Honiara, Solomon Islands – A new agreement between Solomon Islands Telekom Limited (Our Telekom), the Solomon Islands Postal Corporation (Solomon Post), and United Nations Development Programme (UNDP) marks a pivotal moment in the landscape of digital innovation and financial inclusion in the Solomon Islands. The UNDP, in partnership with Solomon Island’s Ministry of Commerce, Industry, Labour & Immigration (MCILI), has agreed to collaborate with the two leading entities in the telecommunications and digital innovation sector to launch an innovation challenge aimed at improving access to finance for informal economy players.
Under the European Union-funded project "Supporting Informal Enterprises' Transition towards Sustainable Growth and Formalization in the African, Caribbean, and Pacific Region", this groundbreaking partnership will see both entities receiving innovation grant support to foster the development of digital tools that will significantly enhance access to finance for firms operating within the informal economy. Moreover, the partnership aims to catalyze the creation of new digital financial products with immense potential for impact and scalability.
Our Telekom, through their M-SELEN mobile money services, will develop a digital solution to enhance financial inclusion in the Solomon Islands' informal sector. This bulk payment tool, targeting micro, small, and medium-sized enterprises (MSMEs) and individuals, facilitates the transition from cash to digital payments. Large enterprises will benefit from streamlined digital payments, enhancing efficiency and security. Informal MSMEs can also become M-SELEN agents, fostering trust and enabling digital transactions. Overall, the M-SELEN Wallet bridges the gap between the informal economy and formal financial services, promoting inclusion and empowerment in the Solomon Islands' digital economy.
At the signing, Tawake Tuitokatuadua, Supervising CEO from Our Telekom, emphasized the vital role of digital solutions in driving financial inclusion. Through this partnership, Our Telekom is committed to developing tailored digital tools that will empower businesses and individuals within the informal economy, enabling them to thrive in today's digital era.
Standing (left to right) ILO representative, Helen Kirsch; Permanent Secretary MCILI, Riley Mersepitu; UNDP Programme Manager, Nanise Saune-Qaloewai; Tawake Tuitokatuadua. Sitting (left to right) Supervising CEO from Our Telekom, and Alfred Ghemu, CEO from Solomon Post.
On the other hand, Solomon Post introduces the 'Digital Jam Jar,' a savings tool for informal businesses, families, and individuals. It allows users to allocate funds for various purposes, offering clarity on spending needs. Unlike traditional methods like physical containers or separate bank accounts, Digital Jam Jars address the challenges posed by low financial literacy and limited bank access in the Solomon Islands. They include Easy Access accounts for immediate expenses and Maturity accounts for long-term savings, helping users manage their finances effectively. Through Ezi Pei, users can easily manage multiple Jam Jar accounts tailored to their needs.
Ms. Caroline Kanoko, Digital Financial Services Director at Solomon Post, speaking on behalf of the CEO for Solomon Post, conveyed how enthusiastic Solomon Post is to be part of this groundbreaking initiative, which aligns with their mission of delivering innovative solutions to enhance the lives of Solomon Islanders. The development of digital Jam Jar accounts represents a significant step towards promoting financial literacy and inclusion, particularly among underserved communities.
The informal sector plays a dominant role in the Solomon Islands economy, accounting for approximately 70 percent of total employment. Access to banking services is quite low, with only 25.6 percent of the population (most of whom are salaried employees) having bank accounts in 2019. About 35 percent of the population uses informal sources of financing such as savings clubs, money lenders, and borrowing from suppliers due to the limited outreach of financial intermediaries and the absence of relevant financial products/services.
The progress in digital innovation by Our Telekom and Solomon Post offers promise and is aligned with the priorities of the government outlined under the Solomon Islands National Development Strategy 2016-2035 (NDS) and the recently launched Solomon Islands National E-commerce Strategy 2022-2027 (NECS). Together, we're paving the way for a more inclusive and empowered future, bridging the gap in access to financial services and fostering economic growth.
UNDP is the leading organization fighting to end the injustice of poverty, inequality, and climate change. Working with our broad network of experts and partners in 170 countries, we help nations to build integrated, lasting solutions for people, peace, and the planet. Learn more at www.pacific.undp.org or follow us on social media at @UNDP_Pacific and @UNDP_Solomons.
For more information or media inquiries please contact:
Daniel Gonzalez, Communications Specialist, UNDP Solomon Islands Office, daniel.calderon.gonzalez@undp.org +677 7740 740 +677 656560270
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