Boost for MSMEs

The National Business
Teachers Savings and Loans Society group chief executive Michael Koisen (left) with Bank of PNG board member James Gore.

By SHIRLEY MAULUDU
BANK of PNG acting governor Benny Popoitai says the establishment of the Credit Guarantee Corporation Ltd (CGCL) will contribute to micro-small and medium enterprises (MSMEs) medium-term development plan.
Popoitai said it would:

Teachers Savings and Loans Society group chief executive Michael Koisen (left) with Bank of PNG board member James Gore.
  • CREATE 33 per cent of the targeted number of MSMEs;
  • CREATE 30 per cent of the targeted formal employment contributions;
  • ACCOUNT for 10 per cent of the national Gross Domestic Product; and,
  • CONTRIBUTE to improving the quality of lives.
BPNG board chairman David Towa (left) with BSP group chief executive Robin Fleming.

The company was launched on Tuesday by Prime Minister James Marape to address the lack of access to credit and capital by MSMEs in the country.
Marape said in accordance with the recently amended Central Banking Act (CBA Amendment 2021), the CGCL would contribute to the objective of the CBA to “promoting employment and economic growth, especially of the non-mineral and non-petroleum sector”.
“For long term sustainable financing and assistance to MSMEs, the Government has realised it had to intervene in the market through a credit scheme to provide third-party credit risk mitigation to lenders to increase access to credit for MSMEs,” he said.

Guests at the launching of CGCL in Port Moresby on Tuesday.

“This is evident in the BSP’s Credit Enhancement Scheme and the National Development Bank’s SME Funding.
“In addition, the establishment of the CGC will help consolidate the various access to finance projects into more long-term and sustainable national programme with appropriate institutional arrangement and mandates to coordinate efforts by all donors and government agencies in accelerating MSMEs growth and development, and to develop a holistic support mechanism to MSMEs through sustainable financing instruments and capacity building.”