Thursday, 31st  August 2023
By Penelope Aimari

On Thursday, 31st August 2023, IBSUniversity Students and Staff were privileged to have the former BSP Chief Executive Officer and current Chairman of People’s Micro Bank, Mr. Robin Fleming as a special guest. Mr. Fleming delivered an insightful lecture on the “Growth of Banking Industry in Papua New Guinea and the Devaluation of Kina, the Winner and Loser” at the Socrates Hall. This guest lecture was organized by the School of Accounting & Finance and Business Management.

Mr. Fleming stressed on two important things, the growth of banking industry and the devaluation of kina. He stated that when the banks lack proper, long-term economic growth goals, the banks face difficulties and sell off to other financial institutions to commercialize and do retail. He also stated the advantages and disadvantages of foreign exchange currency and what can be implemented to avoid the fall of foreign exchange rate.

“The four things that make banking reliable and customer service efficient in Papua New Guinea include an efficient flow of electricity, excellent telecommunication services, security and good decision making,” Mr. Fleming said.
The Chairman of People’s Micro Bank highlighted these four key factors affecting banking industry in Papua New Guinea. Since power outage is common in PNG, the risk of theft when delivering cash to retail branches is high, and when the telecommunication services are poor and the bank’s decision-making is significant. Considering all these, a bank has to be efficient to avoid inconveniences that may cause a loss in the banking industry.

The other significant thing that Mr. Fleming talked about, was the importance of foreign exchange currency. He said, “Allow the exchange currency to find its natural level, as currently Papua New Guinea’s exchange rate is floating.”
Mr. Fleming reminded the students and staff of the fuel issue in the past months. He added, “If the currency falls and the cost of imports increases, what can we do? We import the less expensive, yet quality. Secondly, we forego unnecessary imports. Things that we can process in PNG, we do not have to import, as long as the demand is met. And finally, substitute importing of products.”

Mr. Fleming added that a good thing about foreign exchange is to get foreign currency into our country so we can import. The LNG Project has a lot of contractors overseas, through which PNG brings in foreign currency to pay its employees. Agricultural cash crops like cocoa, coffee and oil palm also bring in foreign currency, which plays an important role in our foreign exchange rate.

Mr. Fleming ended his wonderful lecture to the students and staff of IBSUniversity, stressing more on the importance of savings, to be disciplined and learn to say no to cultural aspects and extended families’ expenses. 
“Prioritize your number one responsibility of savings, so you will not fall into the habit of lending and obtaining loans unnecessarily, that currently have more than 50% interest in almost all of the financial institutions,” Mr. Fleming said.