NDB to commercialize operations: MD

NDB MD Moses Liu

 

By MATTHEW VARI

Sunday, November 6, 2016 (Sunday Chronicle, PNG)  

WITH government support to the National Development Bank still not up to demand in the Small to Medium Sector- the Bank is now seriously looking at commercializing its operations from a state funded one to a privately funded one.

Next year’s budget allocation of K30 million is still below the needs of the growing SME sector that demands loans at a rate of 20% per annum.

NDB Managing Director Moses Liu, said the bank expected something better than the K30 million considering the culling of its budget in the 2016 supplementary budget.

“Basically this year was supposed to be the implementation year, 2017 was supposed to be the implementation of the SME policy.”

“However, it appears that it will be put on the backburner somewhat and I believe we will be struggling to meet the demand, because demand for SME loans is growing at about 20% for an average every year,” Mr Liu said.

He said with the continued shortfalls coming from the national government- talks have taken place with the Department of Treasury for reforms to the banks systems and structures in order for it to survive as a commercial institution.

“We are currently looking at commercializing the bank basically, and there is a proposal before the government now, and that is to making sure that the bank becomes self-sustaining going forward not to keep running to the government every time,” Liu said.

“The government has got other priority areas like education and health and all that those are the key social deliverables and therefore we also believe the economic sector should look after itself in regard to growing the economy and engaging a lot of Papua New Guineans to be involved in businesses”.

“So the sustainable model is to commercialize our bank so that it will maintain its developmental objectives at a concessional rate of lending and also look at the commercial rates as well.”

He said with the commercialization of the bank, there will be two lots of interest offered. One for developmental side in growing the SME sector, and the looking commercial loans for existing SMEs that want to grow to expend their level of operations.