Manufacturers Council wants to see more banks operating in country


THE PNG Manufacturers Council says while it is confident with the regulatory controls in the banking sector and would like to see at least five commercial banks operating in the country.
Chief executive officer Chey Scovell told The National that “right now, we have one major bank with 80 per cent or so (share) of the market”. “They need a serious competitor, “We can’t trap investment, we must attract it.
“If Westpac needs to de-risk by exiting, we can’t halt that.”
Scovell said council members believed that the Kina Bank’s proposed acquisition of Westpac PNG was the “beginnings of a serious play for market share”.
“There is no way that we would see a reduction in services through this acquisition,” he said.
“At the same time, more needs to be done to introduce several more players, be it bringing in established foreign banks or incubating local players through credit unions, cooperatives to major financial institutions.
“The worse thing we can do for business and consumers right now is to believe we can only have one and a half banks in PNG, or to use influence to deny the market to a strong competitor in an otherwise very unbalanced market.”
Scovell said it had been exciting to witness the level of interest and pace at which entrepreneurs had gotten behind the PNG Think Tank Group’s push for its own bank.
“The more than K50 million pledges by business owners, workers and MPs is perhaps a barometer of the dissatisfaction with our present banking services,” he said.
“Businesses, wage earners and all account holders have had enough with the poor level of access and quality of services.
“It is alarming that all the banks with foreign ties have had to make a decision to wind back in Papua New Guinea, not for lack of profitability, but risk.”
Scovell said New Zealand with a population of 2.5 million, three times less than PNG, had 27 licensed banks operating.