Over 660 owners of Small to Medium Enterprises (SMEs) have benefited from the National Government supported loan facility, the SME Credit Enhancement Scheme Loan (SME CESL) through BSP Financial Group Limited (BSP) with over K90m funded as at 9th November 2021.
According to BSP Group CEO Robin Fleming, since the announcement in May of the reduction of equity requirement from 30% to 10%, more SME owners have benefited from improved access the credit enhancement loan.
“This also included the change in the maximum loan amount from a maximum of K3m to K5m at a fixed low interest rate of 5% for a repayment period of up to 15 years.”
“Since the relaxation of requirement on equity, we were able to fund 667 SMEs with a total of K92.1m at an average loan size of K140,000 from the K100m allocated to BSP under the CESL,” said Mr Fleming. Mr Fleming added that there have only been a small number of defaults under the facility with the current level of delinquencies well within the banks acceptable thresholds.
BSP Head of SME Jeffrey Singer added that apart from funding 667 SMEs across industries with retail and other businesses at 70% and in provinces with the Highlands and Momase regions combined at 65%, BSP also has 233 applications pending to the value of K57.9m.
“The assessment of loans includes SMEs being able 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,” said Mr Singer.
BSP has a pipeline of applications in progress for a value of approximately K40m and under the agreement with the Government BSP continues to provide small business owners access to the facility notwithstanding that the total approvals will exceed K100m by year end on the basis that further government funding will be forthcoming and also based on repayments from existing borrowers allowing for funds from the original K100 to be re-lent.
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. Non BSP customers are also eligible.