Not party to the government’s subsidised loan scheme for small and medium-sized businesses, Kina Bank has unveiled its own range of products aimed at supporting SMEs in Papua New Guinea. Chief Executive Officer, Greg Pawson, explains the thinking behind the move to Business Advantage PNG.
Kina Bank’s Greg Pawson.
Business Advantage PNG:
Successive PNG governments have had a long-term plan to encourage the development of small and medium-sized businesses. We’ve already seen a rollout of a cheap loan schemes aimed specifically at assisting SMEs. Kina Bank did not get involved with that. Let’s talk about what you actually have decided to go to the market with.
Greg Pawson:
We are very encouraged by the government’s focus on the SME sector. We see that as being integral to the future growth and prosperity of PNG.
However, we differed with the government’s view on this tranche of concession lending. The government shouldn’t have to do that. Banks should do that of their own accord because, in an emerging market like PNG, it’s simply the right thing to do.
It’s not a good use of government funding to be subsidising the banks to lend to the small business sector. We’d rather they spent that money on infrastructure, hospitals and schools.
We didn’t get accepted into the K200 million pool that was allocated to BSP and National Development Bank. But our approach was: we’ll do it anyway.
‘A lot of business enterprises don’t have equity available to them. The capital fund helps solve that problem.’
We’ve come out with a SME loan product of up to K500,000 (secured) or K100,000 (unsecured) at four per cent interest per annum, with an extended term of up to 15 years. It goes to businesses that are turning over up to K5 million a year.
We’ve fast-tracked the approval process to be able to access that scheme. There’s effectively a checklist, where our bankers pre-qualify customers and approve it on the spot. As you can imagine, we’ve had an incredible amount of inquiries around it.
We’ve allocated an initial tranche of K50 million for that particular product and we’ll see how that goes.
The important factor, though, is it’s not free money. When the government put out this K200 million subsidised scheme, a lot of small businesses were thinking it was free money. That’s not the case at all. It’s a concessional loan facility.
Business Advantage PNG:
You’ve also flagged a fund to invest directly in SMEs …
Greg Pawson:
The other part is the capital fund that we’re putting in place for those businesses that just need a bit of a capital injection to start to get that next phase of their growth.
That’s about allocating a tranche of money and putting it into a formal fund administered by Kina Funds Management.
‘The way we gear up our relationship management for businesses is more advisory-based. We’re not going to see the customer just to take an order.’
A lot of business enterprises don’t have equity available to them. The capital fund helps solve that problem.
We become a form of silent debt in the business, and provide a whole bunch of advisory services to help them out. We’ll help them with a business plan, a cashflow forecast, accounting software like Xero, help them build a website, whatever the case may be. It will all be part of that model.
Business Advantage PNG:
What other ways can a bank like Kina help with the development of SMEs?
Greg Pawson:
We are putting in place a transactional banking offer for small businesses as well, which will essentially be fee free. It’ll provide access to our payment gateway, which will give them the ability to accept cards for the payment of goods and services online. And we’ll provide a payment card for the SME as well.
Business Advantage PNG:
Kina Haus in downtown Port Moresby. Credit: Kina Bank
That’s really an acknowledgement that SMEs don’t just need a bank account – they need scaffolding around it, don’t they? And different kinds of assistance as they move through their life cycle …
Greg Pawson:
That’s absolutely right. Our business model is a little different to the traditional banks.
For example, the way we gear up our relationship management for businesses is more advisory-based. We’re not going to see the customer just to take an order. We’re going to see them to talk about their future plans: where do they see themselves in five years’ time, and how can we help them get there?
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Want to open a personal Account and a Business Account. What documents do I need for each account?
Well done Kina Bank.
This will really help us local SMEs who are struggling to grow our small businesses around PNG.
GP thank you for this very information and I agree.. This initiative will really help the simple people secure SME Business loans.
Very much interested.
Thinking of establishing a resort on Fishermans Island but need a capital to get it started.
I can be contacted thru my email: mthomas@transport.gov.pg or Gmail: tmadaha074@gmail.com
Greg Pawson and Kina Bank, honestly you guys are God sent; such an excellent work.
What an amazing and smart business model Kina Bank has come with in assisting SMEs in their growth and business development plans for SMEs. It’s very interesting & encouraging to read how you clearly explained KBs SME market business model.
I look forward to further enquire and seek advise and assistance at the nearest branch in Port Moresby soon. Thank you for the announcement.
How can I apply or who will I see to apply for sme loan?
Thank you Mr. Pawson and thank you Kina Bank. I very much agree with you on the point that the subsidy given to the banks mentioned, should have been put to better use – health, education, infrastructure, law & order issuesetc.
It should entirely be the banks’ initiative to be supporting local SMEs and the like, considering people are paying so much in various monthly bank charges/fees.
A brilliant initiative where there’s so much potential for both SMEs and the bank to grow together. We’ll done.
Thank you Kina Bank for this great product that will really assist the SME sector. I am interested in this product. More infor please. Thank you Sheila Petelo
Well planned, Kina Bank Management. Thumb up for the structure you’ve placed for SME strugglers, the more you help the more you get.
I am very interested and wanted to mention here to you that I am starting up a PMV BUS SERVICE BUSINESS which, I want you to assist me with 1coaster bus, 1 Isuzu Dyna to help people to bring their crops to the market and a 15 seater bus. However, due to population increasing repidly in my Province of Eastern Highlands, in my district-Unggai Bena towards Henganofi district. People are looking for PMV buses to go to town. Sometimes people can wait from morning till evening and go back home.
Therefore, My plan is to met the after 5 years planned to get something on ground and give back Something good back to the Kina Bank and as well as providing services to the public(people) in my place.
I have 5 experienced drivers, 3 experienced mechanics who are currently on the ground.
Please I need your assistance.
For more information about me, please contact me via.
Email address: pethsalom7@gmail.com
Contact Phone number: +675 79194660
Thankyou and awaiting your response.
G.P CEO Kina Bank your actions is highly appreciate in regard to the loan product to support local SMEs and also many less fees is one very attractive service you have proven your self to deserve credit […]
Very interesting I want full set of fishing gears and are two dinghy’s for fishing please assist me call me on 67574738887
I have the resources but no support
I’ve been banking with kina bank, and this would be an opportunity for me to apply for a loan for my business.What are the requirements??
Want to know more about this
I registered a SME family company to assist Rural famers sell their produce. I have being trying to get that BSP SME loan but was said to have K10,000 to get the loan. I have no capital and struggling to have starting capital.
Please kindly advise me and because I did need that support and asistance.
Please email me.
limited.trap@gmail.com
Tom
Thank you Kina Bank for taking this path differently. It really shows the heart you have to develop local SME
Greg Pawson, you’re doing a great job for PNGeans, I wish government could allocate that 80mil to Kina bank as I believe no one has access that funding with NDB as yet, as I believe they have their own in-house issues.
Very good.its so good of kina bank to take the initiative to help us out of the economic crisis. I’m very interested and would like to know more and apply for a loan.Thanks
Thank you kina bank for coming up with a very excellent service offered to the very simple Papua New Guiniean who need help to start our little sme business. Please can you forward to us more information of how to go about getting type of Loan’s and how the repayment . Thank you
I am impressed by Kina Bank’s approach to supporting SMEs. I am looking for an investor to partner with my SME group to go into food processing. Would like to know more about capital loan and its support activities.
Good morning, I just this article and I wish to collect more information. We are running Shuttle Bus business, and wish to expand our business through the SME.. Thank you
well done Kina Bank
Good evening
This is absolute blessing to us small businesses in PNG.
I am very much interested to know more to expand my Maintenance business. Thankyou Kina Bank 🏦
Pauline Brown
Hi Pauline I agree wholeheartedly please visit your nearest branch and meet with a kina bank officer at the the enquiries section.. Otherwise you can also visit the kina bank website on http://www.kina.com.pg.
I am interested in this product and need to understand the details of it and my SME may become a beneficiary.
Very interesting,how can i apply for a loan for a boat…plis advice…..
It is a very excellent good service offered by Kina bank. Thank you so very much for this announcement.