Almost K500m in deposits by members: Bank

 By ERIC BALARIA

THE savings and loans industry has almost half a billion kina in deposits from its 

members, the Bank of Papua New Guinea (BPNG) says.

BPNG assistant governor Ellison Pidik said from 2004 to the end of last year, 

deposits made by members had increased from K174 million to K480 million followed by an increase in membership from 35,000 to more than 200,000 in that period.

Pidik said the value of the industry’s assets had grown from K233 million in 2004 to K977 million in 2014 due to the growth of the industry.

“Generally, the savings and loans industry has grown from strength to strength, in the last 14 years, since reforms commenced in 2000,” he said.

“This growth trends indicate that the savings and loans industry is truly well and alive and is developing in this country and I believe is a pacemaker in the Pacific at large.

“Although the numbers of savings and loans societies have decreased from 100 to now about 22 societies, the cleanup exercise 

undertaken by the bank has actually strengthened the governance processes and other controls that resulted in the growth of the industry.”

Pidik said despite the growth, there were some challenges that the industry faces, including bad governance and poor management of societies.

“We continue to experience now the inability of some societies to afford good management information systems to manage their day to day and to be able to have the business figures in their fingertips,” he said.

“Poor lending practices resulting in high rates of loans in defaults and other compliance issues.”