Peter Aitsi, Group Chief Executive Officer of Credit Corporation (PNG) Ltd, says the COVID-19 pandemic has had a significant impact on operations. He tells Business Advantage PNG that the company is moving to a more agile digital platform and diversifying its product range.

Business Advantage PNG (BAPNG): How has the COVID-19 pandemic affected Credit Corp?

Peter Aitsi (PA): As with many companies around the world, COVID’s arrival really has impacted our ability to operate. The restrictions that have been introduced to manage COVID have had a significant impact on normal trade within the economy and, as a result, many of our customers have been affected. That flows through to their ability to service their loans with us.

Our focus has been on working with our customers to try to mitigate the impacts. It will take a little time to get these customers back to some sort of normality. As they return to normal trading terms and we see that settled, we will then look to assess what further actions are needed.

BAPNG: Have you been giving repayment ‘holidays’?

PA: We operate across the Pacific – PNG, Fiji, Vanuatu, the Solomon Islands and Timor-Leste. Governments within the region stepped in fairly quickly and, through their central banks, asked the banking and finance sectors to consider loan repayment holidays. We have applied a relatively similar approach in each country, however tailored to the level of impact. This was also based on the mix of customers operating in various sectors, as some sectors were more impacted then others, such as tourism and hospitality.

In PNG, in the initial period of March through to May 2020, we didn’t have a lot of requests, but the situation changed from June as the impact became more pronounced on the economy. We have had to help many of our customers to manage through until the end of 2020. In all of our jurisdictions, there is a view that the effects will linger through to the second half of 2021.

‘As with many companies operating in the finance industry, we are moving into a more digitally efficient business, looking to implement digital platforms which allow us to better integrate with our customer base.’

BAPNG: Have some industry sectors been affected more than others in PNG?

PA: In the June period, when there was a high degree of uncertainty, there was noticeably a broader impact. While PNG is not as dependent on tourism as other countries in the Pacific, we do have a significant amount of business travel that takes place between us and our key markets. So that had an immediate flow-through impact to the hospitality sector, particularly the hotels in our major cities.

It then flowed through to the suppliers of those businesses. The second group who were impacted were contractors, particularly to government. As government constrained its activities and reallocated its funding into the response to COVID, we saw an immediate impact on small-to-medium, and even mid-sized business, particularly contractors whose revenues depend on government.

BAPNG: How are you responding strategically to the crisis?

PA: As with many companies operating in the finance industry, we are moving into a more digitally efficient business, looking to implement digital platforms which allow us to better integrate with our customer base.

That started 12 months ago; COVID has accelerated the application of online connectivity, with the use of platforms such as Zoom now becoming the norm in order to engage with our customers, clients and various stakeholders. But I believe in the PNG market, and the Pacific market, there is always that desire to have that face-to-face contact. It is still very important. I think people just want normality to be restored and to have that social contact.

‘We are looking to broaden our product base to further grow our market share.’

BAPNG: Are you changing your product mix?

Aitsi: We are diversifying our product base away from just equipment finance to looking at other products that could provide more options for our customers. We have been offering insurance premium funding and are looking at a product to target the consumer market. We have an investment product – our term deposit – which offers good returns. We are looking to broaden our product base to further grow our market share.

BAPNG: With the retreat of the international banks from PNG, is there an opportunity for Credit Corporation?

Aitsi: I see it as an opportunity. From the PNG government’s point of view and the regulators’ point of view, they want growth within the banking and finance sector. We have a very under-serviced population in respect of financial services, which has caused the Bank of Papua New Guinea to really encourage new players into the market. You see that with the growth of microfinance and there have been other new arrivals in the finance sector.

It is encouraging and there is space there for another operator, a third pillar for banking. We obviously have an interest in trying to fill that space.