SME LOANS – K200 MILLION

Financing your business and growing it is a dream for many SME owners. 

Getting financial assistance from the Government does not come often. 

There have been stringent requirements by banks and financial institutions which have hindered SMEs from borrowing. 

The Government has recently announced the allocation of K200 million SME Loans in Papua New Guinea. Below is the breakdown. 

• BSP receives K100 million
• NDB receives K80 million
• Admin receives K20 million

Further breakdown by Sectors;

• K40 m = Agriculture-related 
• K24 m = Youths & SMEs
• K8 m = Women alone SMEs
• K8 m = Bougainvillean SMEs
• K40 m = Monitoring by Dept.

The general conditions for BSP are that; our SME owners can access amounts from K100, 000 and above at a rate of 5% for up to 15 years repayment period.

On the other hand, NDB might provide loans with the following general conditions;

• Loans from K5,000 to K100,000 
• 20% Equity 
• Interest of 4% per annum 
• Repayment period of up to 15 years. 

More information on the Terms and Conditions for both banks are provided below. 

NDB ANNOUNCES SME LOANS TERMS & CONDITIONS

For BSP, scroll right down.

SME Loans NDB logo

The Government has allocated K80 million to NDB from the K200 million SME Loans. Below is the breakdown of the allocation by NDB;

• K40 million to MSME Agriculture;
• K24 million to Youth & Small Business Enterprise Loan;
• K8 million to Women in Business Loan; and
• K8 million to Bougainville Enterprise.

TERMS & CONDITIONS BY NDB

There are two (2) sections to obtain an SME loan under any of the above four products; the FIRST TIMERS and the GROWERS.

A. FIRST TIMERS

Those who are applying as first timeers must;

1. Have an IPA Business Registration Certificate and a IRC TIN Number
2. Open or have an account with Peoples Micro Bank Limited
3. Produce a realistic Cash Flow Projection
4. Provide a Certificate of Completion for a Financial Literacy course (Read more about our Financial Literacy Training which is facilitated nationwide) 
5. Have a clean credit record
6. Application Fee is at 1% and Debt Servicing must be above 2:1

B. GROWERS

Those who are applying as Growers for any of the four SME Loan products must;

1. Have an IPA Business Registration Certificate and an IRC TIN Number
2. Commodity Board License (if applicable) and Endorsement from DAL or NPMA of viability and Cash Flow Projection must be endorsed by agency (agriculture products).
3. Annual Returns for IPA and IRC both show profitability
4. Have a clean Credit Record
5. Provide a Certificate of Completion for a Financial Literacy course (Read more about our Financial Literacy Training which is facilitated nationwide) 
6. Application Fee is at 1% and Debt Servicing must be above 2:1 based on future projections and above 1.5:1 on past history with payments on a quarterly basis.

All applications will be received, assessed and processed by NDB staff in branches throughout the country and forwarded to NDB Credit for advice and approval.

In the meantime, applicants should prepare themselves in terms of ensuring that the above mentioned requirements met.

UPDATE (21/10/2020): BSP RECEIVES K100 MILLION FROM PMJM. SMEs CAN BORROW NOW. 

BSP TERMS & CONDITIONS

BSP is a Lender

BSP has received a K100 million from PMJM to start lending to SMEs nationwide. 

More details of it’s Terms and Conditions will be published here but below are tips to consider, as provided by the bank’s staff upon initial enquiry. 

Also, BSP made some clarification recently on its loan terms and conditions. 

The SME Credit Enhancement Scheme Loan is a low cost loan product provided by BSP under a partnership arrangement with the government for MSME in all sectors of economy.

PRODUCT FEATURES 

The Loan Product Features include;

1. K5000 minimum to K3 million maximum loan amount
2. Six (6) months minimum to 180 months (15 years) maximum repayment term
3. Fixed Interest Rate is 5%
4. Working capital and stock purchase limited to K50,000 over 12 months term.
5. 30% equity contribution (in cash or other securable assets)

REQUIREMENTS 

The Loan Requirements include;

1. Completed Loan Application form
2. Business / Company profile
3. TIN Certificate
4. IPA Certificate / Trading License
5. Copy of recent TAX Returns
6. Quotations from suppliers or vendors for business asset purchases
7. Copies of current ID for directors, owners or signatories 
8. Copies of documents showing ownership of security assets.

Source; Presley Wapyer, BSP, POM, NCD

……………… 

More updates on the SME Loans will be published here shortly. Check this space! 

Source: PC 23/10/2020

HOW CAN WE HELP YOU? 

At PNG SME DIRECTORY, we can assist your SME in the following areas;

1. We can register your Business with IPA, get your TIN from IRC and help open your Bank Account. The Package is for only K300. Apply now from this website. No credit cards required.

2. We can produce a professional and appealing Business Profile (as required by the banks). The regular fee is K500. We’re discounting it for only K300 specifically for this SME Loans. Read more about our Business Profiles.

3. We can do Business Proposals (Plans) with Cash Flow for your business so you can use it to obtain loans. This is a fundamental requirement of every bank and financial institution.

Read more about Financing Your Business. Other information can be obtained from the financial institutions and banks. 

Also, read more about our Financial Literacy Training which is facilitated nationwide at the moment. We also have Online Financial Literacy Training where you can get FLT online. 

Contact us for more information.

Sources; PC 2/10/2020, PC 20/10/2020, PC 23/10/2020

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