Developing a financial competency framework for Pacific Island countries : discussion paper - July 2009

Engagement with the money economy is increasing across the Pacific. However, many people in the Pacific continue to be excluded from the formal financial system and/or have limited knowledge and skill required to successfully manage household cash flows and participate in the formal financial system, in particular the use of financial products and services. The development of a financial competency framework for Pacific Island Countries will facilitate the development of inclusive financial sectors in Pacific Island Countries and will contribute to ensuring households and communities can competently engage with the money economy and the formal financial sector, thereby reducing the risk of alienation and marginalisation. The use of capability and competency frameworks is common in a number of contexts, including (inter alia) skills training, primary, secondary and adult education, and the provision of health services, the law, and professional accreditation. The use of frameworks is also being adopted in financial services, in particular in the UK and Australia. The development of a financial competency framework for Pacific Island Countries will provide a guide for Central Banks in fostering both an inclusive financial sector and the development of appropriate enabling regulatory and supervisory regimes to guide and support an inclusive financial sector. The Framework will also be useful for banks and other financial service providers in guiding the development of appropriate products and services, an appropriate delivery environment and appropriate disclosure. The Framework will provide a set of learning outcomes for training providers to guide needs analysis and the development and measurement of appropriate financial literacy training initiatives.