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K100 million for SMEs in PNG
05:03 am GMT+12, 21/10/2020, Papua New Guinea

Bank South Pacific(BSP) will start accepting loan applications from small to medium enterprises who have a good track record of net profit for their businesses starting today.
 
Having a good net profit after tax is one of the key components in the terms of conditions for small businesses wishing to apply for a loan under this lending scheme with BSP.
 
This means that if a SME has a net profit after tax of K500,000(US$143,000) its net profit margin would be around K50,000(US$14,299) which will enable customer to borrow K300,000(US$85,000) over three years and K400,000(US$114,000)over five years .
 
The state through the Department of Commerce and Industry has presented a cheque of K100m(US$28.6 million) as security to BSP that will enable the bank to start lending to customers once they are apply and are eligible for a loan.
 
BSP chief executive officer Robin Fleming said the facility is available to both BSP and other customers and key component with government was the as security for the credit facility will be available a long time.
 
Fleming said normal lending requirements will apply and the bank has already come up with a loan portfolio for smart businesses for K100m(US$28.6 million.
 
He said requirements will include some collateral as confirmation to be able to repay the loan and hopefully able to bear with the lower interest rate however the loan term will depend on the asset the customer will be purchasing.
 
“We are trying to be responsible that we are not providing a loan with a term which will be longer than the asset that you’re purchasing.
 
We will have some flexibility especially with the turnovers below K500,000(US$143,000) in relation to the collateral that we require and the key objective is to ensure the default rates are not higher than what we have at the moment which is tracking around 15 per cent,” he said.
 
Prime Minister James Marape said the K100million(US$28.6 million) presented to BSP will be held in trust as security for Papua New Guineans who go and borrow for five per cent for 15 years.
 
Marape said he has asked BSP and Commerce and Industry to do two groups for start-up and existing businesses so that customers will have the opportunity to partner with the bank to access loan.
 
“This partnership with BSP will be a 10 year program with K100m and for the next 10 years we are creating a facility of K1billion(US$286 million) with BSP to be factored every year in BSP.
 
BSP will work with government, treasury and Central Bank in other monetary and fiscal policies to enable BSP to have sufficient liquidity in its banking system,” he said.

SOURCE: POST COURIER/PACNEWS


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