Council shocked by loan delay

THE Micro Small Medium Enterprise (MSME) Council is surprised that the National Development Bank (NDB) is reviewing its lending policy, thus delaying the release of the K80 million government-guaranteed credit facility.
SME Council president Desmond Yaninen said NDB chairman Michael Mell had blamed the delay on the adjustment to the lending criteria. “The NDB did a submission to the Commerce and Industry in 2020 about the lending guidelines and criteria for MSMEs which was approved. And based on that, the first K80 million was paid,” Yaninen told The National.
“We are surprised that now NDB wants to revise its lending policy.
“Whatever it does, we encourage NDB to lend responsibly and only to clients with equity and security to safeguard the money.
“This is a loan facility and not a grant so proper guidelines must be put in place.
“To assist borrowers, the Credit Guarantee Corporation must be funded and established so it will provide partial security for loan applications.”
The National attempted to get comments from NDB which said it would not comment further.
The Government gave K80 million to the bank after it had signed an agreement last year to provide a credit facility to MSME’s at an interest rate of 4 per cent.
It named four loan products: agriculture, Bougainville enterprise, youth and small business enterprise and women in business.
One of the requirements when applying for a loans is to provide a financial literacy training certificate for loan range of between K5,000 to K500,000.