K30mil for MSME credit facility

By GLORIA BAUAI
THE Bank of Papua New Guinea has allocated K30 million in capital towards the creation of the much awaited Macro, Small to Medium Enterprise (MSME) credit guarantee corporation facility, an official says.
BPNG governor Loi Bakani said they were only waiting for K20 million contribution from the Government to fund the facility.
“Given the importance of MSME sector, the Central Bank and Government are working on establishing this credit guarantee corporation,” he said.
“This will be a facility for MSMEs to access when they’re getting loans from financial institutions.”
MSME Council president Des Yaninen said this would greatly help MSMEs.
Yaninen explained that the credit guarantee corporation would guarantee security for MSMEs wishing to get loans.
“Basically, MSMEs need to have some form of security when applying for loan,” he said.
“But because they don’t have security, they don’t qualify for loan and don’t access funding.
“So this organisation is supposed to help the MSMEs by putting up a guarantee for them; all they (MSMEs) have to do is pay a little fee and the credit guarantee corporation will put the guarantee for them to borow loan.”
Yaninen said this was based off the Malaysian credit guarantee corporation model and was something BPNG had been working on for a number of years now.
He said MSME Council had been involved in the process and they were looking forward to getting it off the ground so it would make MSME funding more accessible for the people.
“In fact, that particular proposal has been submitted to the National Executive Council (NEC) twice – it first approved back in 2012 then resubmitted and reapproved in 2019,” he said.
“We’ve been very excited about that and have been supporting that drive for a very long time.
“All we are waiting for now is the implementation.”
Bakani said they hoped to launch it this year.