Komati banks on crowd funding

BANKING

By DALE LUMA
SAMSON Komati from Hagen Central in Western Highlands is taking an unconventional approach in the banking sector in PNG.
Komati who has a Master’s degree in Public Administration from the California State University, currently serving as the chairman for the PNG Think Tank Group Inc has started a major crowd funding movement to raise capital to enter the banking space.
In an interview with The National recently, Komati said pledges have already gone past K30 million with reputable pledgers such as Prime Minister James Marape himself.
“We started an unconventional way of raising people’s attention towards a need,” Komati said.
“What is happening throughout the nation now is that all the big commercial banks are leaving.
“We used to have in the 70s and 80s, seven big banks then eventually over time they merged and they left and now ANZ bank’s retail side has been bought by Kina.
“When there are two major commercial banks, it creates a duopoly, the lending rates will be high, the interest rates will be high, banking fees continue to be excessive, long banking queues and all these issues.
“When you have two, three, four, five or even 10 commercial banks operating in the country, then our people will be benefiting from very low interest rates, lesser bank fees, queues and the issues faced every day by our hard working people.
“For the crowding funding, we are basically securing the pledges now, we are telling the people that we are about to buy a bank.
“But you don’t give us the money, you tell us if you are interested, if you want to be a shareholder and owner of a bank, we will go through the normal process.
“We are making the call online on all social media and asking for interested investors who will indicate to us from a minimum of K10,000 to a maximum of K10 million per person, entity or organisation.
“So we have 900-plus people heading towards 1,000 nationwide in the 22 provinces and some overseas as well who have pledged and we are forcing this to grow.”
Approach going forward
“Our plans are to firstly raise the first K100 million and we are on target. Our main target is through prospectors raise K1 billion as capital to either buy shares in some of the country’s banks or start up an SME (small to medium enterprise) bank of its own.
“A working committee has already been set up and have registered a holding company called PNG MSME Corporation Ltd and a subsidiary company called Asia Pacific Finance Group Ltd with the Investment Promotion Authority (IPA).
The working committee has already met with the Bank of PNG (BPNG) and have started the process for a banking license, according to Komati.
“It will also meet with the securities commission of PNG to discuss way the forward for the crowd funding movement.
“The working committee will engage a reputable nationally owned accounting firm to manage all funds from the crowd funding (equity deposits) from the first 2,000 foundation members and later from the rest of the pledgers,” Komati said.
“It will also engage a reputable nationally owned corporate law firm to oversee all legal and regulatory compliances for our new SME banking and financial services corporation in PNG.”
Komati said memoranda will be signed by the pledgers before committing their contributions to ensure accountability and protection of their money and share certificates will be given to them as shareholders.
Why start the crowd funding movement
“The main objective of the crowd funding to build a PNG SME bank is that the Papua New Guinea people always think that government and members will give them something and their lives will be changed.
“They also think that they will ask around for money from relatives. So the begging mentality and cargo cult mentality affect all the people including the educated ones.
“What we are doing is saying no, all over the world, in big economies all over the world there is one way to lead a successful life for all families and professional individuals and that is dealing with the banks.
“You get school fees from the bank, mortgage financed by the banks, business start-ups from the banks, the bank is like the mother and father to anyone’s life.
“Nowhere in the world have people followed politicians around, only in this place (country).
“We are trying to shift the mindset of our people to migrate them to focus banks, we will bring the interest rates down, short term loan processing, lesser bank fees and it will change the entire banking sector in the country.
“The whole vision behind this is that the people of Papua New Guinea must own their own bank.
“The economy of any country to be owned by the people means that the people have to own the bank.
“When they own several banks, they own the economy and they are empowered. When foreigners own the banks, the people in the country struggle and that happens everywhere in developing countries.
“Our people must shift away from cargo cult to going to the banks and getting their life’s grown and matured through the banks, they become successful through the banks.
“That will now shift the mindset of the people to be hard working, creative, entrepreneurship, SME investments and all these.
“That’s basically we have is that the Prime Minister and his wife have pledge among other government leaders and politicians and a lot of other people.
“Our target is to get on 2,000 pledges and if the first 900 have pledged more than K30 million, I’, expecting the balance of another 1,100 pledges, it might go up to another K30 million, K70 million or K100 million.”
“This is a market that has never been tapped before, no public call for investment like this has ever been done in this country.
“This is the only first historical movement that is happening but what we are using is unconventional, we are using crowd funding.”