Bay man banks on new system

A Bay man is helping to radically overhaul the banking system of a small central Asian country where people stash their money under their mattresses.
Brian Bluck, a Tauranga business consultant, was hired by the World Bank to change the banking habits of the people of Kyrgyz Republic under a $US12 million ($16.4m) project.
Over the years the five million people of Kyrgyz Republic - a poor mountainous country which borders China and Kazakhstan and relies on agriculture - have never bothered with bank accounts and instead stashed their money under their mattresses at home.
Their distrust of banks wasn't helped when two of them went broke in the changeover from communism 13 years ago.
Mr Bluck, a former BNZ executive, is hoping to change all that.
After visiting Kyrgyz twice in the last six months, Mr Bluck convinced the banking authorities to introduce a direct debit payments system and a smart bank card - similar to Eftpos in New Zealand.
He estimates the World Bank is funding the banking project to the tune of $US12 million.
Mr Bluck organised an international tender to establish a fully-equipped data processing centre in the Kyrgyz capital of Bishkek and 20 companies, mainly from Europe, chased the contract.
The World Bank accepted Mr Bluck's independent recommendation on the tender and a letter of acceptance is this week being sent to the successful Baltic company, which will establish a new computerised system for the National Bank of Kyrgyz Republic.
His job nearly done, he is now thumbing through a 60-page contract to make sure nothing has been missed as Kyrgyz prepares to step into the modern banking world. "A new banking system is crucial for Kyrgyz's economy," said Mr Bluck. "There is a payments system between commercial organisations but the World Bank wants to establish a banking system for the wider population," he told the Bay of Plenty Times.
"Most of the people live with money under their mattresses and use the barter system - they don't have any bank accounts at all.
"It is a non-tax environment and the government is missing out on revenue," he said. Once the new smart card system is up and running, the Kyrgyz people will have to be persuaded to use it, said Mr Bluck.
"They have to feel the banks are trustworthy and that's going to be a very big task - it may take 20 to 30 years to settle down into a worthwhile system.
"But as the economy gets on its feet and the government begins paying pensions and disability allowances people will see the value of using bank accounts." Despite being poor, Kyrgyz has the world's second biggest goldmine that is being developed in a joint venture with a Canadian company.
The republic, also known for hunting and fishing, sends wheat and potatoes to France and wool to Russia. But many of its people are barely living above the subsistence level.
Mr Bluck said people earning 1600 som ($40) a month regarded themselves as being reasonably well off - and that's about the level at which they will be able to use the new smart cards.
He said the banking authorities in Kyrgyz had accepted their system had fallen away and wanted to do things properly. "You can't help but like that attitude and it's been rewarding working with them." Mr Bluck's connection with Kyrgyz began when he received a phone call from a former New Zealand Data Bank manager Bill Postgate who is now working in London.
Mr Bluck had been in charge of credit cards and Eftpos at the Bank of New Zealand for 12 years. After 35 years with the bank he took early retirement and established his own card payments consultancy, moving from Wellington to Tauranga 11 years ago.
He has been in demand. During that time Mr Bluck has completed projects in Australia, Singapore, Malaysia, Papua New Guinea, England, Russia, Kurdistan, Taiwan and the Philippines.