Banks should relax SME loan requirements

ONE of PRIME Minister James Marape’s signature policy of “Taking back PNG” through small to medium enterprises (SMEs) and micro, small to medium enterprises (MSMEs) is either progressing at a snail’s pace or not at all because bank policies and guidelines are not conducive for the people intended to source the loans.
As a result, the public hype since the policy was introduced, is waning and the Government is copping the brunt unnecessarily.
I am challenging the National Development Bank and Bank South Pacific to speed up the processing of loan applications.
Some of these applications are from two years ago.
I hate to believe that the two banks (NDB and BSP) are either incompetent or deliberately colluding with political elements to suppress the implementation of the SME loan scheme, which is the first of its kind in Papua New Guinea.
The Department of Commerce and Industry, under its corporative society division, has all the necessary skills and training to help various corporative societies to source loans under the SME scheme but the banks are refusing to honour that.
The difference between the Investment Promotions Authority (IPA) Act and Co-operative Societies (Amendment) Act 1985 is that the former involves business registration by both foreigners and nationals while the latter is restricted to nationals.
As it stands, the IPA and co-operative society have no problems with each other as far as the legal frameworks are concerned.
Why are the banks not accepting loan applications by co-operative societies, even when they have tax identification numbers (TIN) from The Internal Revenue Commisison?
What more do the banks require from the people?
The banks have a duty to revise their guidelines to support the Pangu government policies to empower Papua New Guineans financially through SMEs and MSMEs.
The party that brought forward Independence under the leadership of the late Grand Chief Sir Michael Somare drafted the visionary eight-point development plan, which was later revised and coined the five national goals and directive principles was the preamble to the Constitution.
Sir Michael and our founding fathers intended to give financial independence to our citizens.
Marape has taken over the baton and is firmly working towards achieving that vision.
I appeal to the banks to amend their guidelines.
For instance, NDB has a guideline where only 18 to 30 year olds are eligible.
You are talking about a young group of people who have just come out of school or started work.
How can they have the collateral?
BSP requires collateral, which is out of reach by grassroots.

Patrick Pundao,
National President,
Pangu Pati