The National Development Bank Limited urges local MSME businesses to be registered with the Investment Promotion Authority before applying for Micro, Small and Medium Enterprise (MSME) loan packages.
Acting Managing Director Aaron Underdown said this was one of the important requirements that local MSMEs must meet in order to benefit from the four new products of the government’s K80million MSME program.
These products include Women in Business (WIB), Youth and Small Business (YSBE), Agriculture and Bougainville Business Loan (BEL).
“Other requirements include a certificate in financial literacy, a cash flow projection, a credit report and an account with People’s Micro Bank, if applicable, and an IRC Tin number,” he said.
“It is important for clients to note that the Bank does not offer financial literacy training. It is their individual responsibility to check with other institutions that offer to acquire a certificate themselves, ”he said.
Underdown also added that the capital and security requirements differ slightly from loan to loan.
“The WIB, YSBE AND BEL programs all require 20 percent equity with 100 percent security, while the agricultural loan program requires only 10 percent equity with 50 percent security,” he said. -he declares.
Customers should note that fairness and security are different from each other; while equity is a percentage of the total value of a business.
Security is a collateral or asset that is secured by the loan to help mitigate risk to the bank.
The collateral for the loan can take the form of secured movable property and land or property with clear title.
“It is important for SMEs to note that once you get the loan you have to take responsibility for paying off your debts in full so that the same money goes to another local Papua New Guinea to also start up or expand. his business, ”Mr. Underdown urged.