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BSP Reduces Equity on SME Credit Enhancement Scheme Loan

Wednesday, May 12, 2021

Owners of Small to Medium Enterprises in Papua New Guinea can now access the National Government supported loan facility – SME Credit Enhancement Scheme Loan at the BSP Financial Group Limited (BSP) with a lower equity requirement and higher maximum loan amount effective immediately.

BSP has significantly reduced its amount of equity requirement for SME Credit Enhancement Scheme Loan and increased its maximum loan amount of borrowing.

BSP has reduced the equity contribution for the credit enhancement scheme loan from 30% to 10% to provide more SME owners with access to the credit enhancement scheme loan. After discussions with the Department of Commerce and Industry, the maximum loan amount under the facility has also been increased from K3m to K5m at a fixed low interest rate of 5% for a repayment period of up to 15 years.

BSP Group Chief Executive Officer, Robin Fleming announced the reduction saying, “the bank has reduced its equity requirement from 30% to 10% and increased its maximum loan borrowing under the scheme from K3m to K5m to improve access to credit for more SMEs.”

“A more relaxed requirement on equity is necessary to reach as many SMEs as possible under the scheme to promote Government objectives. This adjustment is expected to assist our SME customers relieve pressure on their cash reserves during this period of time,” added Fleming.

The reduced equity requirement and increased maximum loan amount however, do not alter BSP’s lending conditions, and borrowers are expected to meet BSP’s normal credit requirements to access finance under the scheme. This includes SME borrowers demonstrating their capacity to meet ongoing loan commitments and are able to provide acceptable collaterals to cover loan amounts. The emphasis is also on the ability of a borrower to comply with regulatory requirements that includes meeting their tax obligations annually.

Stanerd Wai on Radio explaining SME to customers

BSP Head of SME Stanerd Wai said that: “since its inception, BSP has funded a total of K38m to over 256 customers through the scheme.” Mr Wai added that: “over one hundred potential borrowers with total loan amount of K10.4m have missed out due to equity constraints in the last three months after the launching. We have a pipeline of over K50m going through the assessment and drawdown processes and we expect an increase in our pipeline activities as the changes fuels more demand for credit from customers.”

BSP SME Credit Enhancement Scheme Loan is open to all SME owners and it does include the ability to refinance existing loans.

Customers can enquire at all BSP branches throughout the country and particularly at the three dedicated BSP SME Business Centres at Vision City - Port Moresby, Goroka and Lae.