NDB clarifies SME funding

The National Development Bank (NDB) is focused on improving the lives of the rural population and working families and individuals.

The NDB is allowing them to borrow funds to start up or strengthen existing Micro, Small and Medium Enterprises (MSME).

The Government’s commitment of K1 billion in 2019 to boost the MSME and SME sector is going to be a milestone initiative and a game changer for PNG if successfully delivered.

NDB chairman, Michael Yake Mell, said for this program to be successful it requires total commitment from all participating stakeholders comprising of both banks who are rolling out the MSME and SME loans, SME customers and the potential unreached customers.

The government has delivered the first K200 million (2019) of the total promised MSME and SME funding of K1 billion over five years (2019-2024).

The NDB MSME and SME roll out program is also targeting the unreached potential MSME and SME customer is very important; a sector that does not attract most banks, he said.

NDB is taking this challenge by rolling out the MSME and SME program to where it matters most, giving hope to the unreached population in line with the Government’s SME policy.

Mell said this is a big challenge for NDB as a bank, to implement the government’s MSME and SME policy priority directly extending opportunity to empower ordinary people the opportunity to start their own business.

Over the next five years (2019-2024), K500 million will be parked in BSP and K500 million parked in NDB to drive the MSME and SME sector in PNG.

The first K200 million has already been delivered by the current government to BSP and NDB in 2019.

“I applaud this bold decision made by the government to empower our people to engage in business. Given the current down turn in the economy coupled with the COVID-19 pandemic, it has been tough for everyone in PNG, the government has made the right decision. I also want to thank the government for releasing the first K80 million for NDB to drive the MSME and SME policy,” he said.

NDB Acting Chief Executive Officer, Gary Coplin, said the process for lending the K80 million funding has already began at the bank’s 20 branches throughout the country.

The targets for the new loan funding in 2021 have been set out for borrowers at the respective branches.

Coplin said the bank has issued specific instructions to branches to aim for new loans for companies at 6.5 percent and MSME loans at 4 percent.

Branch officers were also empowered to manage customer expectations in order to achieve the bank and the customer’s targets, he said.

The target for MSME loans is based on the population size in each province so there is no bias in the distribution of the MSME loan facility.

“There are four new MSME loan products at 4 percent interest rate that includes agriculture loans – K40 million, youth and small business – K24 million, women in business loan – K8 million and Bougainville Enterprise Loans (Buka branch) – K8 million, totalling K80 million,” he said.

Coplin said the NDB board and management was delighted to release these facts and information for public consumption and also make its position clear as to how the funds were distributed evenly throughout the country based on the population density.

“We are not targeting big businesses with these funds but small people who may have the desire to start something to generate income for themselves and develop the culture to manage it,” Coplin said.

Mell added that “the NDB board does not have any personal interest whatsoever in the selection and distribution of the K80 million and therefore should not be falsely accused or blamed for something it has not done”.

“All powers and responsibilities rest on the bank’s existing policies and guidelines managed by its employees whose role is to execute the loan facilities,” he clarified.

The chairman said the board hopes that this now puts to rest all misleading and unsubstantiated information circulating in social media and public domain.

Press release