Teachers Savings and Loan Society (TISA) was one of three financial institutions to receive a banking licence in 2024, alongside Credit Bank PNG and the National Banking Corporation. TISA Group CEO Michael Koisen shares the new bank’s growth plans in an exclusive interview with Business Advantage PNG.

TISA Group CEO Michael Koisen. Credit: BAI

Business Advantage PNG (BAPNG): What are your plans for TISA Bank in the coming year?

Michael Koisen (MK): Our focus will be on addressing the unbanked and underbanked population. But we also will be taking in SMEs, small to mid-sized corporates and the large corporates. We’re open to doing banking for everyone.

We’re currently working on getting our foreign correspondent banking license. That’s a hard piece, as you know. Since the globals [financial institutions] have de-risked their balance sheets, the Pacific is suffering because of that. Hopefully, if Papua New Guinea doesn’t make the [Anti-Money Laundering] grey list next year, then we’ll get the corresponding banking license and then we’ll do trade finance and forex.

BAPNG: What’s your roadmap to being a fully functioning bank?

MK: We’ve got a website that’s up and running. Our customers can self-register for internet banking on the website. We’ve got the facility available: all the customer accounts, the transaction accounts, all the banking services are available on the website.

“To reach out to our population, we need to go into the rural areas.”

We have a mobile app already. You can download it and do phone banking.

We recently launched the first branch at Waigani, that’s operational now. We will roll out some branches throughout the country.  We are building a digital hub in Waigani, which will hopefully be operational in the first quarter on 2025. [It will] act as a concierge to train our people to use digital means as part of financial literacy. It’s customer-facing. Those that have access to digital devices can do their banking in that hub. It’s part of our role, we feel, to train our people to use devices to do their banking.

The unbanked and underbanked population is about 75 per cent of the market. Our strategy is to allow them transactions up to K10,000 without a full KYC [Know Your Customer]. All they need to do is bring a photo ID and a letter from the village magistrate or the pastor confirming their identity. We’ve got devices in which we can take their biometrics, take the pictures and it goes on our system. If they go over the 10,000 kina limit, then we will require a full KYC because of AML [Anti-Money Laundering] standards.

BAPNG: What is your strategy for reaching out to people who don’t have much exposure to the formal banking sector?

MK: I’ve gone to Cambodia and Vietnam and I’ve seen the agency banking model that works in those countries. Every street corner has a banking agency that’s licenced by the regulator and reports directly to the bank. It provides normal banking services, savings, lending, even does forex, trading US dollars on the streets of Cambodia.

To reach out to our population, we need to go into the rural areas. Bricks and mortar is expensive and there’s a risk to being there, whereas the trade store in the village knows the community.

We will help the [village stores] to run a banking agency. We’ll give them all the devices they need.

We have a head of agency banking that I’ve brought in from Myanmar, where she oversaw a similar project. And Sunil [Pokharel, the CEO of TISA Bank] also has experience in Nepal and Myanmar.

We’re going to go out as far as infrastructure will allow us. It’s going to take money and time. But we’re willing to spend it because this is home for us and we’re not going anywhere.

BAPNG: With the increasing number of banking licences in PNG, do you see the competition as a positive?

MK: I see that as positive. But I also say that, if we’re going to have a real impact on the banking sector and in the lives of people, it’s important to us as an institution to scale. You’ve got BSP at around 65 per cent market share. You’ve got Kina Bank at 15 per cent, and ANZ and Westpac at 10 per cent each. And then you’ve got TISA and CreditCorp who have just come in like drops in the bucket.

We’ve got to be realistic. How are we going to have an impact in the banking sector at that scale? Organic growth takes time. I think somewhere along the line some rationalisation needs to happen. I think there’s a possibility [of mergers] there – not to encourage it, but those discussions need to be had in order to make it possible to build scale, to have a real impact.

BAPNG: Where do you see TISA Bank in a couple of years?

MK: All over the country, serving the community, helping SMEs grow. And, if possible, going to the [Pacific] region.

But PNG first, and then the other islands have limited growth [opportunities]. Our insurance company operates in those islands already through our subsidiary.