Bank set to expand

 WORLD Bank member, the International Finance Corporation, plans to invest US$30 million (K71.8 million) and has mobilised an additional US$50 million (K119.6 million) through a syndication to allow Bank South Pacific, to expand its financing and promote private sector growth. 

The global development institution will invest in BSP with more than 50% market share of loans and deposits in the country.

As part of this syndicate group, Netherlands Development Finance Company (FMO) and German development finance institution Deutsche Investitions and EntwicklungsgesellschaftmbH (DEG) will be investing significantly into BSP, the largest commercial bank in Papua New Guinea. 

This will mark FMO’s first direct investment in the country while DEG is renewing its support to Papua New Guinea.   

General manager of treasury at BSP Mark Railston said: “BSP has worked hard over the past decade to become a sophisticated banking institution offering integrated solutions to our corporate clients, but our ability to compete effectively in the foreign exchange lending market has been constrained by limited access to longer-term foreign currency funding. 

“With this new facility, BSP will be better able to service Papua New Guinea’s growing private sector including small and medium enterprises linked to the natural resources sectors that need access to US dollars.” 

The bank has the largest network of branches, rural outlets and ATMs servicing more than a million customers across the Pacific.

 IFC has supported BSP since 2010, assisting the bank’s expansion into small-to-medium and rural-banking segments in Papua New Guinea and across the Pacific. 

IFC’s regional manager for the Pacific Gavin Murray said: “BSP is critical to national economic growth. 

“For PNG to meet its development potential, the country needs strong domestic financial institutions that can provide the financial products needed for the private sector to grow, provide employment and ultimately boost prosperity.”