The Solomon Islands, one of the third largest archipelago countries, consists of nearly 900 islands with a total population of 400,000. It is located between the sea routes of the South Pacific Ocean, the Solomon Sea and the Coral Sea. Given its unique landscape and dispersed population, there is limited banking and credit access in the Solomon Islands. Currently, there are about 300 islands that are inhabited and within those islands, there are only 14 bank branches.
Current Status of Financial Inclusion
Limited banking and credit access in the Solomon Islands impact the way Solomon Islanders handle their finances. According to the Solomon Islands’ financial demand-side survey, the following statistics reveal the involvement in the Solomon Islands’ financial sector.
- 8 percent own a bank account in different financial institutions such as a credit union or loan company
- 26 percent of adults over the age of 15 own a bank account
- 31 percent are not able to access any type of financial services
- 35 percent of Solomon Islanders use services such as a moneylender or a savings club
It is important to note the barriers that Solomon Islanders face when they attempt to enter the financial sector. One of the many barriers includes the country’s mountainous and rainforest-covered landscape which constrains their ability to access financial services such as banks or ATMs.
It was reported that those without bank accounts live an average of 6 hours away from a bank while those with bank accounts must travel about 2 hours to access banking services. The farther away Solomon Islanders are from accessible financial services the more costly it is to participate in the financial sector.
Understanding the Gender Gap
It is important to address gender disparity when it comes to the financial involvement between men and women in the Solomon Islands. Only 20 percent of adult women have a commercial bank account compared to 32 percent of males. The Solomon Islands National Financial Inclusion Strategy 2016-2020 (NFIS) notes that “Banked adults now average 4.5 years more schooling than the unbanked: a factor that helps explain the widening gender divide.” The gap is also evident in terms of literacy rates as 89 percent of men in the country are able to read and write compared to only 79 percent of women.
Solutions for Financial Exclusion
The government is prioritizing efforts to provide accessible banking and credit access in the Solomon Islands and though it has been a tedious process there has been some progress. The updated NFIS strategy has a goal of helping men, women and young people “to be financially competent and have access to a full range of financial services that help them achieve greater financial security and financial opportunity.” Overall, the goal is to ensure that 300,000 adults to have a form of formal or semi-formal financial accounts by 2020. The NFIS also seeks to ensure that 90 percent of the population will be able to access financial services within one hour of ordinary travel from their homes.
The Solomon Islands Government also launched the Women’s Financial Inclusion in the Solomon Islands which focuses on empowering women to realize “their full potential, importance, and status, and be increasingly recognized and heard in Solomon Islands society.” The program also seeks to provide women with the necessary tools to become business owners and participate in the private sector. A number of initiatives have been spearheaded under the Women’s’ Financial Inclusion program:
- Jorio Java Dovele Women’s Association Saving Club
- Gizo Environment, Livelihood and Conservation Association
- West Are’Are Rokotanikeni Association
Overall, promoting financial inclusion through greater credit access to the Solomon Islands has the potential to bridge the gender gap in the country while creating economic opportunity for those in rural areas.
– Jocelyn Aguilar