Loan facility for SMEs

The National Business

By DALE LUMA
WHOLLY-owned local small to medium enterprises (SMEs) in the country can apply for a new Kina Bank-funded K50 million concessional loan facility which will be rolled out to the market.

Chief executive officer Greg Pawson said the loan product carried a four per cent interest rate and came with no fees such as an upfront application fee.
“Our new concessional loan is only available to Papua New Guinean-owned businesses, this is an essential part of governments scheme and we think this is the right thing to do in terms of ensuring we are supporting local businesses to achieve the growth aspirations,” he said.
“A simplified assessment process has been put in place to ensure that we can handle enquiries and applications efficiently and this will help support the SME sector by improving access to finance.
“We have also removed a number of fees including the upfront application fee, other application fees we’ve removed include the documentation fees, cheque processing fees, inspection fees, draw down fees and settlement fees.
“We are being ruthless about taking banking back to basics.
“All the ancillary fees and charges we think are absolutely nonsense and we have removed that act as a hindrance to SMEs getting access to finance.
“This is not government funded, this is a Kina Bank led initiative so we are not receiving any government support funding for this programme and we are doing it on our own.”
Pawson said customers could take out a maximum K500,000 secured loan with a repayment term of 15 years and a maximum K100,000 for an unsecured loan for a term of up to seven years.
“With respect to that our normal credit requirement apply but we have set up a dedicated team to service application and enquiries,” he said.
“Initially, we are allocating a tranche of K50mil to the SME concessional loan product and we will monitor that in terms of success and if it is successful and obviously we will top up that tranche over time.”
Executive general manager for lending Asi Nauna said there would be a quicker turnaround time for credit decisions as part of the process.
She said the maximum turn over as part of the edibility is K5 million per annum with a minimum trading year of two years.

7 comments

  • This is a great initiative! The removal of fees that Kina Bank feels are “absolutely nonsense”, coupled with the 4% interest and the amount PNG-owned SME’s are eligible to roll out makes the process of entrepreneurship a bit easy for the local folks. A GREAT investment!

  • Thank you Kina Bank for the right initiative and the decision to assist the struggling nationally-owned enterprises in this country . The interest rate is quite affordable with flexible and longer repayment terms. What we may have been waiting for is right here so make use

  • Thank you Kina Bank for choosing to invest in the SME sector in PNG. A third world country and developing economy like ours need catalysts and stimulants like this to enable the local enterprises to unleash their economic potentials to create many opportunities. Once again, that is the way forward Kina Bank!

  • For Public Servants in PNG, to start a small to medium scale enterprise, would Kina Bank will depise its corporate decision to allow the savings held by the Nambawan Super savings as collateral to obtain a concessional loan as our Government does not have any clear retirement policy for aging or retiring public servants in Papua New Guinea.

    Thank you over to you.

  • This is a welcoming news for some of us. I commend Kina Bank for taking up this initiative.
    I wonder BSP would do the same.

  • Define new boundaries and become the leader and serve the existing markets of the bulk (SMEs). This is a compelling tagline strategy that is position to improve customer base at the SME level which is a win-win for Kina Bank and the SMEs.

  • This SME loan facility will definitely energise SME sector as other banks have unbelievable administration fees. Thank you Kina for this initiative.

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