"With direct funding support from the Government, Bank South Pacific (BSP) will now be able to provide an affordable lending facility to the SME sector at a competitive interest rate of 5 per cent," said BSP Group CEO Robin Fleming when signing the K100m partnership agreement with the PNG Government on Thursday 24th September, 2020, at the Government House, Port Moresby.
According to Mr Fleming: "BSP as a PNG owned bank, is delighted to be part of such scheme which will provide loan assistance to 100% locally owned Small to Medium Enterprises.
He said that the BSP SME Credit Enhancement Loan is a positive development for the SME sector and would stimulate economic growth in this sector. "Access to finance under this arrangement will be subject to BSP's lending guidelines ad potential borrowing customers will be required to demonstrate their capacity to repay their loans on a monthly basis and provide evidence of required security assets to secure the principle loan amounts."
"SME owners who are BSP customers can borrow from K5, 000 up to K3, 000,000 at a rate of 5 percent for a repayment period of up to 15 years, depending on the assets being financed under the facility. This loan product will be of great assistance to our SME customers during this Covid-19 period," Fleming said.
"Under the agreement, access to finance will be considered for SME businesses and companies that are 100% nationally owned. However, those business and companies must also comply with regulatory requirements that includes registrations with Investment Promotion Authority (IPA), register for Tax Identification Number (TIN) with Internal Revenue Commission, and be able to meet their tax obligations annually," Fleming added. "Refinancing of existing business loans with BSP and other banks are permitted under this loan product".
BSP SME Credit Enhancement Loan will be available at all BSP branches throughout the country and particularly at the three dedicated BSP SME Business Centers at Vision City - Port Moresby, Goroka and Lae.
BSP had also provided loan repayment relief to individuals and businesses who were impacted by Covid-19 downturn from April to July 2020. This repayment holiday period has ended however, BSP's reduced indicator lending rate of one per cent on all lending products remain effective as of 1st April 2020 for new loans. During this time and Covid-19 restrictions, BSP has been able to keep all of its branches open and the majority of its sub-branches notwithstanding challenges it has encountered.
BSP Deputy GM Retail Kili Tambua Dept of Commerce Industry Acting Secretary Joseph Vutliu Governor General Sir Bob Dadae and BSP Group CEO Robin Fleming