By Prospero Laput, Content Producer, HKU FinTech *
In the Pacific Islands, geography plays a critical role in economic participation. With numerous outlying islands, accessing financial services in capital cities like Honiara in the Solomon Islands often requires days of travel for those in remote areas.
Ross Buckley, a leading expert in finance, technology, and regulatory frameworks, has closely studied the Pacific Islands and their financial inclusion challenges. “The only viable solution for financial inclusion is mobile money or some form of digitally delivered service, as bricks-and-mortar branches can never be widely established.” He is a Scientia Professor and Australian Research Council Fellow at the University of New South Wales.
Mobile Money: The Key to Financial Inclusion
Given these geographic challenges, mobile money services like M-Selen have emerged as the most practical solution for financial inclusion in the Solomon Islands. These digital services bypass the need for physical bank branches, providing a lifeline for those in rural areas.
M-Selen, a mobile money service developed following a 2019 feasibility study, addresses the country’s financial inclusion gaps. Launched in 2023 by Solomon Islands telecom provider Our Telekom, with funding from the Australian government and support from the United Nations Capital Development Fund (UNCDF) (1), M-Selen quickly registered over 76,000 users and processed nearly 100 million SBD in transactions in its first year.
Our Telekom, primarily backed by the Solomon Islands National Provident Fund, provides telecom service coverage to over 85% of the country.
Despite its market dominance, Our Telekom "does not only think about profit and commercial benefits," says Mahidul Haque, who spearheaded mobile money efforts with UNCDF in the country before continuing the same project at Our Telekom. “The company continues to prioritize the socio-economic development of the country.”
With over 16 years of experience in digital technology and finance across banking, telecom, and international development, Haque, along with his team, championed M-Selen’s adoption—offering a fast and convenient way to send money anytime, anywhere, accessible on any phone through simple ID activation and a growing network of agents.
“We’ve registered approximately 10% of the Solomon Islands' population with our mobile money wallet,” says Our Telekom’s CEO, Christina Lasaqa, at M-Selen's first anniversary event in June 2024. “This achievement is especially significant given that over 41% of our users are women, many of whom previously lacked access to formal financial services.” (2)
Empowering women and closing the gender gap can boost GDP in developing countries, a recent report by Evan Gibson, Sangita Gazi, and Douglas Arner has cited. The authors propose rearchitecting financial systems to achieve this, aligned with Alliance for Financial Inclusion’s Denarau Plan and the FinTech4FI Four Pillar framework. (3)
For many Solomon Islanders, traditional banking feels out of reach. M-Selen bridges this gap by offering a simplified, grassroots solution. As one fruit trader from a small market on the outskirts of the city puts it, “We don’t go to the bank because it’s too high level. Just come down to our grassroots.”
With only four banks, all based in Honiara, M-Selen fills a critical gap by delivering financial services directly to rural areas across the archipelago. This initiative not only provides secure and affordable access to money for families and small businesses but also integrates millions into the banking system, helping to boost the overall economy.
A New Era for Financial Inclusion
For Solomon Islanders like Mary Talo, mobile money is a lifeline. “This past year, the high tide is too much,” she says, noting that rising sea levels have submerged many homes in her village of Langalanga Lagoon in Malaita Province. “Not many people live there now. Lots of people moved to Honiara to find jobs.”
After relocating to Honiara due to uninhabitable conditions (4) and financial hardships, Mary, like many others, relies on services like M-Selen to manage her finances and support her family.
However, ensuring the safety of digital financial services remains a key regulatory challenge. Mobile money services like M-Selen must strike a balance—providing a secure platform for users while keeping costs low. As Professor Buckley emphasized, "The number one priority is that when people exchange cash for a digital form of money, it has to be safe."
If providers fail, users could lose their money, eroding trust in the system. Regulations must protect users' funds, while regulatory frameworks should remain adaptive to innovation, ensuring that services stay affordable and accessible for all.
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