SAVING YOUR MONEY: OPERATING WITHOUT A BANK

THERE was a post in a Facebook group about how certain banks were charging clients so many fees that people could not save money at all with those institutions.

A few mentioned that Chinese trade store owners did not bank their money. They kept the cash with them. I heard about this a few years ago.

It may seem an absurd way of keeping one’s money, but when you look at it from another angle you might see that “as long as the money is in their hands, it is their money”.

When the money is placed in the hands of other people, there is no guarantee that you can get the entire amount back - if you want to withdraw all the money.

I had a case where I had some money with a firm from pay deductions and recently they were charging 30% on each amount given to me as “holding fees”, or something like that. (Unbelievable is it not – they charged me for withdrawing my own money?)

It is absurd but that is a reality.

There are certain places in the world, where an efficient banking system is non-existent and people have to keep their money in their houses.

One such place (from an experience a few years back) is the Republic of Nauru, to the northeast of PNG. The expatriate workers working there brought home their pay. There was no account in Nauru’s bank that they can save money in. 

 Photo: Expats in Nauru - two PNGeans (left and right), a ni-Vanuatu and a Fijian.

Expatriates had to send money home using the Western Union Money Transfer agent or a government facility to transact money into their accounts back home (and of course fees would be charged).

It was a challenge for many workers. You had all your pay with you, and you had to budget to use so much, and at the same time, know how much you were saving from the amount you had.

I think it was a worthwhile exercise for  a few – developing the skill to stash cash away and yet knowing you can only use so much in a fortnight.

In a way, workers became their own bankers.

I think a similar thing was learned by vanilla growers in East Sepik (and other provinces) in 1998-2000.

Most of them were illiterate and semi-literate villagers but the price for the beans was good and these man of the land raked in tens of thousands of kina – and kept them all in their houses.

Opening up banking accounts was too complicated for them, for the banks asked for identification details and signatures and a lot of things that the villagers could not give.

Sadly, many of the villagers were not knowledgeable about savings and possible investments in other ventures and when the price of the vanilla bean went down, most lost their money.

At that time, when the price on the green beans was good, it was said that the banks did not have money. That is to say, there was more money in the villages (in the houses and pockets of villagers) than there was in the local banks at Wewak, the capital of East Sepik Province.