BSP increases SME loan amount


BANK South Pacific (BSP) Financial Group Ltd chief executive officer Robin Fleming says the bank and the Department of Commerce and Industry (DCI) have agreed to increase the maximum loan under the small-to-medium enterprise (SME) credit enhancement facility to K5 million.
Fleming told The National that the previous limit was K3 million when the Government first released K100 million as security to the bank under its K200 million SME allocation for BSP to rollout the loan facility last year.
“We are also reviewing the required equity percentage at the request of DCI to reduce this based on feedback from SME bodies and forums to assist SME’s who have repayment capacity to take advantage of the credit enhancement facility,” he said.
“BSP has approved 216 loans valued K30 million since last October.
“There are also loans valued at K16 million in various stages of approval and drawdown.
“At this stage, BSP has not received the funding planned for this year but that is not preventing BSP from giving loans under the facility .
“There remains significant capacity for BSP to continue to assess, approve and funds loans under the facility.
“The agreement with the Government did provide for momentum in the SME facility to be maintained while allowing for the Government budget and funding process to be adhered to.
“BSP cannot comment on how the National Development Bank (NDB) is dealing with the K80 million it received, but the intent, when discussions were initiated, was that BSP would be lending to more mature SMEs and NDB to startup ventures. In addition to enabling SMEs to access lower cost of funds through the facility with BSP, we also have a responsibility to ensure that Government funding is preserved by not approving loans that have a higher risk of default.
“While it is still a short period since the facility was launched, delinquency rates are comparatively better than had been envisaged hence the review of equity requirements.”