Rural banking in Fiji : the influence of mobile banking on livelihoods

Abstract

In the past, rural areas in Fiji have been poorly serviced by banks and financial services. The resulting financial exclusion has restricted the number of money management avenues available to Fijians living in these areas and has constrained rural Fijians from deferring consumption and investing in a wider range of livelihood assets.

In late 2004 the ANZ Bank launched a mobile banking scheme aiming to deliver financial services to the rural areas of Fiji. Since its inception the scheme has proved very popular with over 50,000 accounts being opened. The aim of this research was to explore how this mobile banking scheme has influenced the livelihoods of those Fijians making use of the service. A case study based on semi-structured interviews with indigenous Fijians using the service in the Serua province was the focus. As the research is based on a case study, the findings are unable to be generalised and applied across the rest of the country. However, they provide an indication of the influence that this scheme has had on the livelihoods of the participants in Serua province.

The research found that the mobile bank had enabled the case study participants to defer the consumption of their income, by giving them the ability to set money aside as savings. These savings were being used towards achieving their desired livelihood outcomes, with education of their children, business investment, asset development and reduced vulnerability being the most frequently mentioned.

Another finding was the way that mobile banking was influencing cultural aspects such as kerekere (the traditional Fijian practice of gifting goods and money on request). Some of the participants were using the mobile bank to 'hide' money away from the other members of the community. This enabled them to avoid having to comply with the constant requests for money. While kerekere had helped them to cope with vulnerability in the past, it had also become a source of much hardship and frustration. For some of the participants in the research the mobile banking scheme was supporting a process of cultural change, away from the currently dominant collectivist culture towards a more individual focus. This is an important consideration as these 'traditional safety nets' (such as kerekere) have been identified by the Fijian Government, as a way of mitigating the effects of poverty. Further influences of the scheme on livelihoods included the assistance that the mobile bank scheme had given to participants involved in business. By creating an enabling policy environment the mobile bank scheme had given the participants access to credit, a service they had previously struggled to get. Furthermore, their participation in the formal financial sector gave all participants valuable skills in financial management, contributing to their personal development, well-being, and sense of financial inclusion.