MARCH 29 2022
Prime Minister Hon. James Marape has consolidated his mettle as ‘Father of Micro Small to Medium Enterprises (MSMEs)’ in Papua New Guinea with the launching of the Credit Guarantee Corporation Ltd (CGCL) in Port Moresby today to further the growth of the MSME sector.
This is also in line with the Pangu Government’s ‘Take Back PNG’ policy to put businesses in the hands of Papua New Guineans through cheaper loans, long-term borrowing and lower collateral.
PM Marape announced Government cash injection of K50 million to kickstart the CGCL, adding on to the K300 million already given to Bank South Pacific (BSP) and National Development Bank (NDB) to loan out to MSMEs.
The CGCL, which comes under the Bank of PNG (BPNG), will provide financial collateral as security to MSMEs seeking loans from commercial banks to grow their businesses.
“Today, in the sunset of the 10th Parliament, I am happy that we are launching this Credit Guarantee Corporation Ltd,” PM Marape told invited guests including CEOs of commercial banks and SME representatives.
He thanked BPNG and said CGCL would provide security for lenders to give out loans to MSMEs so that they had sufficient liquidity for their businesses.
“My Government has been prominently focused on getting Papua New Guineans away from Facebook, WhatsApp and ‘think tanks’ and into getting their hands dirty, and making it happen for the country,” PM Marape said.
“This is to ensure economic growth and economic sustainability, so that we are not continually exposed to the ups-and-downs of trade and commerce globally.
“What we are doing today is commendable, as it gives those of you who are lending, an added layer of security.”
PM Marape said his Government had shown, over the last two years in office, that was serious about loans to SMEs by partnering BSP and NDB.
“I thank BSP, NDB as well as Kina Bank – who, even without Government support – have been expanding their portfolio in as far as lending is concerned,” he said.
“It’s a small market, but a very active and robust market.”
PM Marape urged people to go into MSMEs, and especially in agriculture, which the Government is supporting in a big way through price stabilization and freight subsidy.
He cited the example of a young man in Sialum, Morobe, who after graduating from university went back home and started a coffee cooperative which generated K800,000 in 2020 and a net profit of K400,000.
PM Marape said lenders should not think that Papua New Guineans did not have the ability to run successful small businesses, as epitomised by the young man from Sialum.