New NCSL loan policy to target SME’s

The NASFUND Contributors Savings & Loans Society (NCSL) will be introducing new lending products targeting Small to Medium Enterprises owners or members venturing into the SME space.

This was announced by NCSL Board Chairman, Ian Tarutia, during the company’s 5th Annual General Meeting in Port Moresby.

The new lending products follows the approval of the revised loan policy and risk credit facility by the NCSL Board in June.

During the 5th AGM in Port Moresby Ian Tarutia announced the Boards approval to revise the current loan policy and risk credit facility.

The revised policy is now before the Bank of PNG.

“Recently at our board meeting in June this year, the Board approved the revised loan policy and risk credit facility that will offer members a wider choice of higher ratio borrowing compared to the 1:2 ceiling. The risk credit facility is targeted at SME owners or venturing into the SME space,” said Tarutia.

“Both the Revised loan policy and risk credit facility are now before the bank of PNG for vetting and clearance.

Tarutia added “Once approved by our regulator, these policies expand the suite of offerings and options for members to suit their prevailing circumstances. We are confident that members will embrace this new initiative.”

CEO, Vari Lahui, said the facility will enable members to invest early in a business well before they leave the workforce.

“Our members will not work forever and they need to ensure that when they retire, they have something to go back too. And we believe offering small business loans provides them that opportunity,” said Lahui.

Several undertakings for 2020 were also announced.

These include:

  • Instant Payment Transfers (2nd Phase of REP’s);
  • Introduction of Scheme Debit/ Credit Cards;
  • Mobile (Phone) Wallet Payment Solutions (using mobile phones to make purchases);
  • Faster transaction processing times
  • Loan Risk Grading/Pricing
  • Streamlined onboarding process
  • New Call Centre;
  • More Point of Sale (POS) Terminals nationwide;
  • Rebranding;

Meanwhile the 2019 Audited Financial Statements were presented and approved by members who attended.

Highlights for 2019 include:

·       Total Assets increased by 24.3% to K230.6 million

·       Net Asset Value increased by 26.7% to K25.6 million

·       Sound General Reserves at K15.2 million

·       Revenue from core business increased by just over 23% to K24.6 million

·       Total Revenue increased by 38.1% to K28.2M

·       In alignment with our strategic objectives, Operating Expenses (excluding Interim Interest Payment to Members and Loan Provisioning) increased by 36.3% to K13.5 million due to technology costs and onboarding of additional personnel

·       Interim Interest Payment to Members increased by 19.3% to K2.1 million.

·       Loan Provisioning Charge increased by 70.9% to K488.3k

·       Net Income increased by 43.2% to K12.1 million (after expenses including interim Interest Payment to Members and Loan Provisioning)

·       Total membership increased by 15.5% to 122,616 members.

·       Members Savings increased by 24.1% to K197.5 million.

·       Net Loan portfolio increased by 37.2% to K111.4 million

·       Member withdrawals reduced by 24.5% to K50.8 million.

·       Total number of loans processed increased by 50% to 109,331.

·       Total volume of loans processed increased by 30.1% to K122.2M.

K11.7 million at a crediting rate of 6.7% was paid to NCSL members for the 2019 financial year.

Picture: NCSL Board Chairman, Ian Tarutia, speaking at ther 5th AGM in Port Moresby. (Credit: NCSL Media and Communications Division)

Cedric Patjole