In 1961, The Reserve Bank of Australia decided to sponsor the development of Savings and Loan Societies in Papua New Guinea as part of its responsibility to develop a financial system to meet the needs of our people. Following investigations both in PNG and Fiji, it was felt that Savings and Loan Societies clearly had a role to play if our people had a wish to make use of them
By January 1962, the Savings and Loan Ordinance became Law and the first societies were officially registered in May and September of the same year. By the late 1960s, the movement spread to nearly every province in the country, but continued to exist as individual units with the Registry of Savings and Loan Societies which was part of the Central Bank, as the central point of contact.
Establishment of the Federation of Savings & Loan Societies (FESALOS)
The Federation of Savings and Loan Societies Limited (FESALOS) was registered in March 22 1966. Its main aim was to promote co-operation amongst societies and to act for their common benefit.
In 1972, Fesalos assumed the major role of promoting and providing services to primary societies, a role, which was largely handled by the Registry staff. Around the same time, regional leagues of savings and loans were set up in some areas to deal with problems of more local nature.
In July of 1972, the Federation of Savings and Loan Societies took over the responsibility of all administration of the Savings and Loan movement from the Reserve Bank of Australia (Registry of Savings and Loan Societies). This move left the Registry to assume the role of administering the Savings and Loan Societies Act and being responsible also for registration of primary societies.
There was also a move to restructure the operation of the movement followed soon after the administrative autonomy. The moves included disbanding of the regional leagues and amalgamation of numerous small savings and loan societies in the rural areas. The move also saw the extension of promotional work into the industrial/urban areas, which saw the formation of industry/employer, based societies.
Development in the Savings and Loan Industry – Revitalization
During the first 10-12 years, the Savings and Loan industry went through a revitalization process. Activities like the liquidation and de-registering of dormant and inactive societies were undertaken as part of the revitalization process. The liquidation process commenced in 1998 and continued for 2 years. During the year 2000 up to 76 dormant societies were placed under liquidation.
The Federation of Savings and Loan Societies Ltd. Was also part of the revitalization process. Its office was relocated to the Bank of Papua New Guinea building in 1995 with the aim of improving communication between the Bank and Federation so as to develop the Federation’s financial and manpower capacity to better serve its member societies. Due to its improved financial position, the Bank of PNG sanctioned Fesalos to relocate, elect a permanent board and resource it with professional staff to properly carry out its responsibilities. Fesalos
FACTS Computer System
Fund Accounting Control Transaction System (FACTS), a centrally controlled system was acquired from Ultra data Pty Ltd, Australia by the Central Bank in 1995 to improve efficiency and performance of primary societies under a bureau type arrangement. Ten (10) primary societies are supported by the FACTS system.