February 11, 2022 by toksavebot
The National Online
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SME programme
COMMERCE and Industry Minister William Samb, in a recent interview with The National, said the Government initiated the K200 million SME programme to support Papua New Guinean businessmen and women in agriculture and SME activities. BSP’s credit enhancement scheme is for established SMEs while NDB’s is intended for startups.
The funding was released in 2020 in which BSP received K100 million, NDB received K80 million and K20 million was received by the Department of Commerce and Industry (DCI) to spread in its sections and sister agencies such as the Investment Promotion Authority (IPA), Small to Medium Enterprise Corporation (Smec) and National Institute of Standards and Industrial Technology among others. Both BSP and NDB have signed agreements with the DCI which the funding is channelled through to the banks.
Both banks as part of their agreement are expected to provide reports of their loan expenditure in order for the government to continue to release funds. .
Bank South Pacific Financial Group Ltd (BSP)
The bank has loaned out more than K122 million from its credit enhancement scheme after the Government gave the bank K100 million in 2020 to rollout the programme. It has received another K100 million as part of the 2021 component.
BSP in its first year of implementation of the programme has loaned out more than K122 million from the first tranche of K100 million allocated in 2020.More than 300 individual business have benefitted from the banks credit enhancement scheme.As a result, the bank has recently received its second tranche of K100 million for 2021.
Chief executive officer Robin Fleming has stated that BSP will now work in partnership with DCI to expand its reach to other provinces outside of Port Moresby and Lae. Fleming said the bank in loaning the funds would ensure that customers were able to repay.
Prime Minister James Marape has commended the commercial bank stating that the partnership with BSP has worked wonders.
National Development Bank (NDB)
NDB on the other hand has loaned out only K2.6 million from its K80 million 2020 component. The bank has been said to be hindered by internal issues which has affected its rollout. A maximum of 21 customers have benefited from NDB’s rollout with the bank reporting nil arrears and no loan written-offs.The bank’s lack of progress has generated criticism from both the public and Government.
Prime Minister James Marape has indicated that NDB would receive its 2021 K80 million allocation once it sorts out its internal issues. State Enterprise Minister William Duma has been tasked to sort out NDB’s issues.
Samb also criticised NDB’s reporting of their rollout following the bank providing his office a two-page report on their expenditure late last year.
He said the bank would have to redo its report and provide it in an appropriate manner which would be provided to the Government to justify a second funding for its soft lending facility.
The bank had indicated in the two-page report that as the state’s development bank, it was positioned strongly to deliver micro, small and medium enterprise loans to indigenous businesses across the country.
It also stated in the report that it should be allocated K100 million out of the K200 million Government budget allocation as a majority state-owned enterprise.
Savings and Loans Societies
Marape has indicated that savings and loans societies will also be partnered considering their membership base.This also included superannuation funds which Marape believed members which will be given access to the lending facility with the banks.
Marape said superfund members could on top of their savings access funds to get into businesses after retirement. He said the partnership could enhance SME growth in the country in the next three to five years.
This would create a multiplier effect in the economy.
Feedback
The SME programme has received its fair share of positive and negative feedback.
Some businesses, especially those outside of main centres of Lae and Port Moresby have stated that they could not access the funding from either bank.
BSP when responding to some of the criticisms said that there was accessibility in all centres.The issue of NDB was raised in the last parliament by Kairuku-Hiri MP Peter Isoaimo who stated that most small businesses had been turned away by the bank.
He said DCI needed to look into correcting the process so that NDB as the people’s bank could serve them.
Outlook
Citizens have been encouraged not to be lazy and try to access funds parked with BSP and NDB and go into businesses. Marape has said that Papua New Guineans, including the unemployed should utilise the funds. He said the Government was looking at bringing investors to partner it on a major scale and citizens needed to make use of the opportunity provided.
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