NDB funding woes continues

Caption: NDB MD Moses Liu addressing the media earlier in the week.

By MATTHEW VARI

Sunday, August 9, 2015 (Sunday Chronicle, PNG)

THE National Development Bank has been hit hard in terms of delivering the much talked about SME (Small to Medium Enterprise) Stimulus Package rolled out in partnership with the National Government to boost the local SME sector in 2012.

In a press conference held earlier in the week, the management of the State owned bank came out through the media to explain to their customers and also the national government why they are not able to meet the demands of the SME sector as agreed upon by both the bank and the government to provide an injection into NDB to the tune of K100 million till 2017 at one of the lowest interest rates in the country.

NDB Managing Director Moses Liu, said that the bank had reached a stage where they had to tell citizens, customers and their stakeholders of their current position in terms of their ability to fund loans despite those being initially approved for funds.

“Due to the lack of government funding to NDB, it has hampered the funding of SME loans, and we have approved loans to the value of over K53 million so far for 498 customers from the SME sector, which unfortunately could not be funded because of a lack of funding.”

“The current situation has been exacerbated due to the fact that the government cannot provide adequately to the National Development Bank to fully implement its SME Stimulus Package which was launch towards the end of 2012,” Liu said.

The bank has been forced to rely on its internal cash flow, which has not been sufficient to maintain the organisation’s operations and maintain its lending regime also.

“We are funded just this year alone to the amount of K39 million just from internal cash flow alone through loan repayments, but that is not sustainable,” Executive Manager Lending Division Trevor Cain said.

“We have managed to keep some of our customers happy but not all of them and that provides a very big impediment to future programs as our cash flow is now dwindling.”

The management reiterated that priority is given to funding loans as they are needed for those small SME owners and startups that have embraced the government stimulus package.

“The demand for SME loans has grown between 20 to 25% over the last two years it has picked up.”

“So during this period we were able to fund over K200 million worth of loans and the expectation from the general public and the SME sector in particular is that we (NDB) will continue to maintain that sort of lending position, unfortunately we cannot,” Liu added.