The suspect aged 34 years met the victim aged 45 and bashed him up yesterday afternoon.
The victim borrowed and accumulated money to a total of K2,000 from the Hagen loan shark but failed to meet the man to pay the money back and then went into hiding.
Gulf police commander Silas Wayagure says the man is currently at the Kerema police cells and will be meeting with the police.
The victim was reported to have sustained a black eye and two broken ribs.