Set up credit scheme, bank told

By PETER ESILA
YANGORU-SAUSSIA MP Richard Maru says the Bank of Papua New Guinea needs to set up a corporation to guarantee credit to grow the small-to-medium enterprise (SME) sector.
Maru, who is a former commerce and industry minister and National Development Bank managing director, said this in Port Moresby on Friday during the closing of the Unity Mall SME fair.
He said he had taken the submission to the National Executive Council for approval when he was minister.
“The Central Bank and Government have not delivered that up to today, this is a need that must happen now, if the Government is serious about SME growth,” Maru said.
“You can’t just give K200 million to the Banks, you must provide guarantees not for wantoks to go and obtain loans like previous failed schemes, but a scheme that is owned by the banks, they could have equity, they assess the loans, if the loans are good, you have a high chance of obtaining the loan, you can be given security so you can secure the loan, this is something that Papua New Guineans need, and it must happen,” Maru said.
He said countries such as Malaysia had such credit guarantees that resulted in a thriving SME sector.
“They have got millions of guarantees out and is the main reason why the Malaysian SME sector is one of the most vibrant, powerful sectors in the world today,” he said.
Maru called on the central bank to start work to create a credit guarantee corporation.
“You have taken far too long, and you need to explain to the people of PNG why we do not have the credit guarantee corporation not established yet, after three years have gone.
“Why don’t we have a credit guarantee corporation in Papua New Guinea, what is the issue, when the Government decision was made in 2018?”