Govt strives to retain money

BANKING

By DALE LUMA
THE Government is trying its best to retain money in the country, says Prime Minister James Marape.
Marape said a way to do that was to have banks which have permanent addresses in the country.
He said this in support of the PNG Think Tank Group’s online crowdfunding movement to get into the banking space to set up an SME bank that is nationally owned.
The movement which is gathering momentum has already received over K30 million in pledges and likely to grow from the interest shown and was officially launched by Prime Minister Marape last Thursday.
“Our government is in the business of trying our best at retaining money in country.
“All forex (foreign exchange) we mobilise come in and we try to retain the money and capital doesn’t go outside and that includes owning banks that has addresses in our country.
“When I look at Tuvalu, it is a nation of 30,000 people and they own their own bank,”Marape said.
“Karkar is an island of 80,000 people, Kiriwina is an ilsnad of 60,000 people, Manus is a province of about 50,000 people and most of our big islands are bigger than four or five Pacific island countries.
“So they own their banks, their telecom (telecommunications) companies, and their own companies that operate in their economic enclaves.”
Space for one or two more banks
Marape said the idea was not bad and there was space for one or two more banks in our country.

“ All forex we mobilise come in and we try to retain the money and capital doesn’t go outside and that includes owning banks that have addresses in our country.”

“For us as a nation of possibly nine or 10 million people, the volume and turnover as far as business is concerned, has a need for more banks and the concept of crowdfunding for a bank that is owned by Papua New Guineans is not out of place in the present economic and banking needs. It is a step in the right direction.”
He said as far as public policy is concerned, for a seed capital, government could step in if the intention was fully honest.
Bendio concept
“There is also a concept that we are looking at called the Bendigo concept in Australia where you have one licence but you have franchises who are operating and this can be an alternative.
“A licence that can be used as a franchise as a way of starting and later on you can go on your own.
Chairman of the PNG Think Tank Group Samson Komati said there was a big space in the banking sector which currently has only commercial and micro banks.
Komati said there were no agriculture banks, and banks for logging, fisheries, SMEs, etc., hence the initiative of the SME bank is to fill the void and reach the unbanked.
“What we are doing is not only to critique the finance and banking industry but also offer an option where the unbanked and small people can have access to the modern financial and banking sector in the country,” Komati said.
“Out of 10 million people, 7.6 million people of this country are unbanked, they don’t have a bank card and nothing to do with banking. They are hand-to-mouth basically. They work hard, get money and spend it.
“So that is a very massive number that we are trying to target, not only the SMEs but the micro and smaller ones and the unbanked.
“One thing about our banks here, they have a commercial bank ceiling, but they don’t have intermediary banks, specialised banks like an agriculture bank, logging bank or farmers’ bank.
“We have the national development bank but there is no intermediary banks. We only have the commercial banks and then down to the micro level.
“And the big banks, they can’t entertain the 85 per cent of our population just because of cash and all the other reasons associated.
“So that prompted us to say let’s set up a bank for our smaller people, the unbanked; there are millions of them and their future will hinge on the bank.
Accounting firm to help
“After these launch, we will now formalise. We are in talks with KPMG, one of the top five accounting firms in the world.
‘They will help us. For all the people who have pledged, we met with the central bank already, we met with the securities commission already, they have given us green light and they are guiding us. They are helping us.
“So what we will do now is work with KPMG to open a trust account for all the people who have pledged.
“We are also looking forward to and are already in negotiations with some of the top internationally recognised law firms in the country.
“They will provide us the legal advice and the accounting advice will come from KPMG.

All done transparently
“Once all that is cleared then we will tell the pledgers that your money is safe, transfer it to this account to KPMG and they will manage it for this group.
“So once that is done, we will now proceed into the next phase so it’s all done very transparently by a credible team.
“Our team has over 200 years of banking experience. A lot of very senior Papua New Guineans have pledged and put their trust in us so we are tracking very carefully. We do everything step by step following procedures and laws to make sure that it is done professionally.
“All the boxes have to be ticked before we call all the pledgers that the time is now then we move forward.
“If you have not pledged yet, join up, trust us, be part of this, it is a game changer.
“This is one of the bigger foundational things, we have to get this bank launched.”
This is not the PNG Tink Tank Group’s first call out for pledges; the first being the Australia Fire Appeal through which funds raised were sent to help bush fire victims in Australia last year.
The group is also one of the staunchest advocators for SMEs and agriculture in the country.