Council points out need for credit scheme

THE Government is urged to establish the Credit Guarantee Scheme Corporation to provide security for small-to-medium enterprises (SMEs) seeking loans, according to the Micro and Small Medium Enterprise (MSME) Council.
Council president Des Yaninen said they agreed that MSMEs should be tax-compliant to apply for a SME loan.
“If they don’t pay taxes, how will the Government get money to bail them out?” he said.
“We need to help each other.
“The new small business tax regime from IRC is a friendly tax that only requires K400 a year if you are a sole trader who makes less than K5,000 in revenue a month.
“Most SMEs will not have access to the package because they do not meet the bank’s equity or security requirements.
“The way around this is for the Government to fund the establishment of the Credit Guarantee Corporation to provide security for SMEs who are unable to.”
Yaninen was responding to Deputy Prime Minister and Commerce Minister Sam Basil’s statement on Thursday to review the K200 million SME loans disbursement.
Basil said it was important that the impact and focus of this loans disbursement addressed not just those impacted by the Covid-19 but also those who were contributing to national development.
He said the registered SMEs, tax-compliant with the Internal Revenue Commission, would attract preferential treatment in accessing future loans or grants, with the furnishing of timely annual reports to the Investment Promotion Authority.
“It was approved by Cabinet in 2018 and is under the Bank of PNG,” Yaninen said.
“But funding has not been allocated to get this off the ground.
“Another recommendation is to park funds with micro banks and not only with the National Development Bank or Bank South Pacific.
“This will make it more accessible to the rural people.”