‘A work in progress’ is how Brett Andrew describes his rebuilding of the decades-old Papua New Guinea finance firm, RIFL.

RIFL’s Brett Andrew

Formed in 1979 as Papua New Guinea’s first merchant bank, Resources & Investment Finance Limited (RIFL) undertook merchant banking activities until it withdrew from the market in late 1999.

‘It did particularly well until the late 1990s, when a series of failed businesses created cash flow problems,’ says Andrew. ‘ This was a difficult trading period in the late 1990s, when it appeared PNG may become a failed economy and the licence was withdrawn.

‘The licence then lay dormant for over 10 years before a revival was embarked upon, resulting in the successful application for a new licence by local PNG company Remington and two other private investors.

‘These shareholders decided it needed a greater investment and experienced resources to make an impact as a genuine competitor in the market.

‘So Remington decided to get serious about halfway through last year and that’s when I was appointed as General Manager.

‘We kept the same name, because it still had goodwill in the market place. We have since formalised the appropriate processes and structures that fall more in line with traditional finance operations.’

Successful model

Andrew has spent 10 of the last 28 years in PNG—working in Port Moresby, Lae and Mt Hagen.

For 21 years, he was a senior executive with AGC Pacific in Australia and PNG, the latter in the 1980s and 1990s, specialising in all aspects of  equipment financing, including financial reporting and administration, business development, operations, systems, credit risk management, policy and procedure development and training of personnel.

‘We were quite successful back in those days and I have used a similar model, to a certain extent, in re-establishing RIFL back into the market. It’s worked particularly well to date.’

Finding the niches

RIFL provides equipment finance for commercial and consumer purposes, including motor vehicles, trucks, earth-moving machinery, and mining and construction equipment. It also specialises in funding technology assets like information technology and office equipment, software and telecommunications.

‘We’re exploring new markets and those existing areas that haven’t been completely dominated by other industry players. We consider vendor financing programmes one of these.’

RIFL has established itself in Port Moresby, with a five-year plan to establish a presence in Lae, Kokopo in East New Britain and the Highlands—a reflection of where Andrew believes major opportunities still exist.

Cashed up

While his main focus is currently on establishing RIFL’s own infrastructure—staffing, loan documentation, policies and procedures, a website—at the same time as building a predominantly commercial equipment finance book, Andrew has reached two significant milestones in just nine months.

The company now has K20 million (US$9m) in receivables and K22 million (US$10 million) in deposits.

‘People seem come here thinking there’s a quick buck to be made in PNG. I don’t see it anymore in small and medium size-enterprises (SMEs).’

‘Within five years, we want that to grow to over K100 million (US$45 million) in receivables, and be a major player in the market,’ he says.

Achieving that in PNG requires a uniquely PNG approach, where relationships are key.

‘Historically, the best way to market in PNG was to cold call and meet people socially,’ he says. ‘It’s still very much a relationship-based commercial environment and I’ve mostly been relationship building since I came back to the country in the 1980s.

‘Everyone’s into branding and brand awareness and we’re fully cognisant of the need to do that … [but] I do think money can sometimes be better spent in programme alliances with vendors and committed sponsorships within the community and sports.’

No quick bucks

But it requires hard work.

‘People seem come here thinking there’s a quick buck to be made in PNG.

‘I don’t see it anymore in small and medium size-enterprises (SMEs). I think the general public is becoming a lot more savvy when it comes to what some businesses offer compared to what they actually deliver.

‘To me, there’s now more long-term investment in the country than I’ve ever seen and I think that’s well overdue.’