Loan pay-back break for some

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LAID off workers and businesses in the hospitality industry as well as the resource and transport sectors will be given relief on loan repayments, Bank South Pacific (BSP) says.
Chief executive officer Robin Fleming said the bank appreciated that with the economic downturn brought about by the coronavirus (Covid-19) pandemic, certain industries would be greatly affected with job losses and scaling down of operations.
Fleming was responding to The National yesterday to clarify doubts on a three-month loan repayment holiday.
“In regard to repayment holidays, BSP understands that businesses in certain sectors will be immediately impacted by reduced revenue and cash flow as a result of measures adopted by the government to minimise the risk of transmission of Covid-19,” he said.
“With international air travel being stopped and domestic air travel also being restricted, airlines, hotels, transport and mining services business sectors will experience downturns in trade.
“As a result and as advised to Government, BSP will provide repayment relief for businesses who have been impacted by Covid-19 downturns and individuals who have lost their job as a result of their employer experiencing downturns due to Covid-19.
“For individuals, this will include repayment holidays up to three months.
“Other banks and other lenders have also indicated there will be support for affected customers on a similar basis to BSP.
“As economic conditions change and if the effects of Covid-19 spread to other sectors, BSP will also review the sectors that may be impacted, and we will adjust the sectors to which repayment holidays apply.
“The repayment holiday at the moment only applies to businesses who have been directly affected by Covid-19 downturns or individuals who have lost their job as a result of the Covid-19 downturn.
“The Bank of PNG (Papua New Guinea) reduced the Kina facility Rate (KFR) which is a signalling rate for monetary policy last week and in response BSP reduced its indicator lending rate by one per cent with all our lending products reducing by one per cent.”
“The KFR is though only a signaling rate and not a source of deposits therefore this will have an impact on BSP’s net interest income and BSP released a statement to the PNG Exchange and South Pacific Stock Exchange to inform our shareholders,” Fleming said.
“To ensure that our variable rate loan customers receive the benefit of the lower interest rates over the next week or so we will be reducing the repayments on those variable interest rate products which include our standard housing loan, residential property investment loan, commercial property investment loan and tailored business loan. The interest rate on overdraft accounts reduces by one per cent and all new personal loans and smart business loans funded after April 1 reduce by one per cent.”


  • However, there appears to be no relief for existing SME borrowers who are currently struggling.
    The 1% interest rate reduction for SMEs only applies to new borrowings effective 1/4/20.
    But who in the SME sector would want to undertake new borrowings given constrained business conditions/cash flow? If you did, you would only be increasing your debt burden, not a smart thing to do, is it?

  • As at such time many of SME businesses are affected do to SOE continue in compliance with the Covid-19 which is majority of the local Papua New Guineans rely heavily on small medium markets for daily sustainability. It is appreciated for decrease in interest rate to one percent. My question is, can this people who engage in small medium markets be given chances to take and per enhance their contribution to this pandemic issue?

  • Banks should also consider Authorities and Organisations apart from those mentioned. Those Authorities and SOEs operate like business houses, get paid from what is earned through registry, compliance and other regulatory duties. Lock down has lead to no revenue generation but increase in expense on rentals, bills and staff wages. Where can we get those monies so some wages will be reduced by certain %. Government should also consider reduction in the wages and salary tax.

  • most our operations were scaled down at LNG site in Tari due to covid19 but could still see loan deductions going on for 2 forts now since the announcement was made. was thinking it was not another media propaganda to paint good name to this all-time thief BSP.

  • That must automatically apply to those affected Industries.

    Some of us were laid off for a month now, we exhaust our leave credits and will be paid leave without pay. Rental bills,power bills, water bills also accumulate as BSP also continue to deduct on our loans.

  • PROFIT or LIFE BSP? Loan Repayment Holiday for 3 months must be or all types of loans including Personal Loans and not only commercial loans.

    We are still paying LOAN and together with RENT payment? you can already imagine the situation!


  • So people who are currently working will Don’t be able to benefit out from the Relief Loan Repayment for 3 months it will only benefit the one’s that are losing there jobs due to Covid 19 Pandemic case..

    The one’s currently working the bank still going to do there normal loan deduction but it will reduce to 1% right…

    If it will be the case than it will be really unfair for the One’s working..

    My point here is Let all the People who have loan credit benefits from these Relief Loan Repayment Package for 3 months because of the global issue we facing…

    Coronavirus disease

  • This 1% doesn’t make sense at all. There should be a total ceased on repayment for 3months. When we are not working how can we repayment the loan. Require further clarification on this

  • To make it fair and equal to all valued customers for BSP, I would suggest that BSP should give everyone tax free holiday for 3 months due to the current SOE. It’s only for 3 months at least you give something back to your customer and assist them during this time of need.

  • Some companies are allowing their staff to take time off with pay if they have annual leave credits and the ones without annual leave credits are applying for leave without pay.
    My question is; how do this ones benefit if they are still working but asked to take time off without pay because of the pandemic?

  • That’s very true, I enquired with customer care and when the agent gave her response regarding what has been mentioned, I told her that everyone is affected and we all should be treated the same, we all have families and we all in this fight. We do not work as usual operations and yet, I still had my 2 for night deductions done by BSP and advise me to get my management to write a letter to them to cease our deductions, I can’t believe this is happening.

  • Please let it be a relieve to all teachers in PNG. BSP you make millions daily. Understand some very adverse situations these fellow Human beings are going through. Prime Minister and our good government our urban teachers are struggling with rental fees, buss fares to and from work, lunch, children’s school fees,lack of a good bed and family privacy, lack of good light to prepare daily lessons. Those who have loans please give them loan repayment break.

  • We live in a Melanesian society. Those laid off and those informal business operators who are affected most by covid19 are placing extra burden on the ones still working. The fortnightly income after loan repayment isn’t enough to feed all. As such, bsp should include the 3 month’s loan repayment grace period to those who are still working.

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