The National, Friday, June 3rd 2011
By PATRICK TALU
SMALL to medium indigenous Papua New Guinean entrepreneurs will benefit from a financial incentives scheme (FIS) or small business credit guarantee scheme courtesy of Small Business Development Corporation (SBDC).
SBDC managing director Diri Kobla parked an additional K500,000 to ANZ Banking Group on Wednesday as seed capital for borrowers under a revised memorandum of understanding which was signed between Kobla and ANZ PNG managing director Vishnu Mohan who is also the chief executive officer of the Pacific Northwest.
A total of K2.1 million is with the bank for the FIS.
Under all those partnerships (MoU) arrangements, SBDC becomes the guarantor by bearing 70% of the loan risk exposure while SME owners bear 30% of the risk.
The MoU with ANZ was first entered in 2006 while the revised MoU signed yesterday highlighted the increasing maximum loan limit of from K60,000 to K500,000.
The FIS coordinator Petrus Ralda, told The National that the increase was to match the increasing cost of doing business.
“SBDC’s FIS programme was developed to address one of the major constraints identified in the national small-medium enterprise policy 1998.
“The major constraint impeding SME development and growth in PNG is the difficulty in accessing affordable finance by SME entrepreneurs in PNG,” Kobla said.
Ralda added that SBDC developed the programme to build the bridge for those who own businesses to access funds for their business activities.
Under the programme, SBDC is working in partnerships with traditional commercial banks like ANZ, BSP, with which a new MoU is being formulated, Nationwide Micro-bank, National Development Bank, Savings and Loans Societies (Sepik Savings and Loans Societies) and Women micro-credit institutions.
They said more than K800,000 had been loaned out and about 15 SMEs benefited.
“Post-loan evaluation revealed that all funded businesses are performing well,” Ralda said.
“Their loan repayment performances are also good despite some difficulties in the beginning.”
SBDC wants to be the vehicle to create employment for youths and job seekers, reduce poverty, improve living standards, reduce rural-urban migration, and reduce law and order problems.
“SBDC sees that when more businesses are created, more chronic socio-economic woes will be eventually eradicated,” he added.
Meanwhile, Mohan said ANZ was grateful to be associated with SBDC and help local business people progress and prosper.