Bank South Pacific committed to developing PNG’s SME sector


Bank South Pacific’s SME manager, Dennis Konu, explains the bank’s innovative strategy for small-to-medium size businesses, and how he is relishing his role with the APEC Business Advisory Council (ABAC).

BSP's Dennis Konu

BSP’s Dennis Konu

Konu is Manager of Bank South Pacific’s (BSP) SME Retail Bank. He tells Business Advantage PNG that hosting ABAC gives PNG businesses an opportunity to witness regional best practice, especially in relation to finance and technology.

‘We had our first meeting in San Francisco this year,’ says Konu. ‘The second meeting is going to happen this week in Port Moresby, which will be the first time that PNG has actually hosted ABAC.

‘Some of the themes we discussed in San Francisco were quite relevant and I felt we were doing it already in PNG, particularly in regards to financial inclusion.’


Konu says Chinese representatives of ABAC have presented their experiences, knowledge and expertise in ecommerce, looking at how Chinese SMEs have accessed global markets through e-commerce.

‘They have expertise around platforms such as Alibaba, where there is a lot of non-banking transactions occurring that are giving SMEs access to global markets. That is something that we want to push, but in PNG we are in the very early stages.

‘Potential clients are: traditional sole traders, owner operators, “Mum and Dad operations,” partnerships, and companies that have turnover of less than $3 million kina.’

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‘In PNG, you still have to look at connectivity issues, you still have to look at infrastructure issues and you still have to look at the literacy issues.’

Konu says BSP has established its SME Retail division to service the smaller end of the business market.

‘This is traditionally the area that doesn’t necessarily have access to loans and other banking products,’ he says.

‘They are not well catered for. So what BSP did, about four years ago, is make a decision that this is a growth part of the market. We need to have a business model that specifically targets these SMEs.’

PNG SMEs under-served

Konu says potential clients are: traditional sole traders, owner operators, “Mum and Dad operations,” partnerships, and companies that have turnover of less than K3 million. If income exceeds K3 million, they become corporate clients.

Helen Victor, BSP SME customer

Helen Victor, BSP SME customer

‘There are challenges to the traditional model of business banking—they have issues keeping proper financial records,’ says Konu.

‘They probably don’t have robust people management systems. There is hardly any succession planning in a lot of these businesses.

‘It is mainly 100 per cent owner-operated businesses. If something happens to the owner, the business goes down the gurgler.’

‘Our loan product starts from $5,000 kina right up to $250,000 kina.’

Konu says BSP developed a model that would relate to the capacity of PNG small businesses.

‘It allowed us to introduce a lending product that is being accessed by this group now.

‘What we offer is the traditional transaction banking accounts, a debit card, access to internet banking and mobile banking.’

Loan product

‘Most importantly, we offer a loan product to these SMEs that, prior to the introduction of Smart Business (bank accounts), probably wouldn’t have had the opportunity to borrow. Our loan product starts from K5,000 right up to K250,000.

‘The good thing about this Smart Business model is that it is available from all the main branches and the sub-branches based in rural areas.

‘It gives them the opportunity to start building their financial footprint by having a bank account.’

‘What we have done with the loan is we have said: ‘Fine, if you can’t provide a finance statement for us to do a traditional assessment on your capacity to borrow, we will look at your cash flow history.

‘That is basically the cash flow that has gone through your bank account.

‘If an average SME wants to borrow, they have got to provide at least 12 months of bank statements which we analyse. That is how we calculate the debt serviceability.

‘It is about giving them that opportunity. But also, prior to that, it gives them the opportunity to start building their financial footprint by having a bank account.’


  1. Elizabeth Dumu says

    Wilson N Worimbangu, as Mr. Konu said, ‘The good thing about this Smart Business model is that it is available from all the main branches and the sub-branches based in rural areas’. So, you may call into your nearest branches for assistance.
    Tiri, I agree with your commendation for BSP, and the points regarding ‘know-how and capital’.
    That said, there are things happening out there in piece meal approaches already which is causing confusion among SMEs and potential SMEs, resulting in some giving up and just living from day to day. For example, while interviewing several farmers, their response to why they did not have a bank account was, “Bai mipela kisim moni wea na putim long account?”.
    Similarly, for the farmers who had an account but did not save, their responses for not saving were, “Pikinini, miplea poret long bank fee ya”, “Mi baim tinpis na rais pinis nau nogat moa moni long save ya”.
    All of these responses mean that they are not ready to walk financially and therefore cannot leave the ‘financial footprint’ which any financial institution would like to see, which Mr. Konu is alluding to.
    This creates a need for collaboration between financial institutions such as BSP, and other stakeholders concerned with improving livelihood initiatives, such as Fresh Produce Development Authority (FPDA), NARI, SBDC, and the like.
    Without the collaboration that is needed, I believe, many potential SME’s are far from taking their first step to even leave that financial foot print which is required to access credit facilities.

  2. Roland says

    Thank you Dennis Nonu. I m currently one of the trainers for the da Tanorama implemented SME Access to Finance Program funded by a World Bank loan with Govt/DCTI input n managed by DCTI. BSP is a partner and the last I heard from Govt. officials was that K150m plus govt funding is available from your section to assist the SME sector. BSP officials have made presentation at this training, the most recent n the 9th training in Wabag (21-29 April). But there is confusion n uncertainty about the availability of this funding n issued surrounding accessibility, particularly in BSP outlets in provincial centres. You may need to clarify this to your officers n to the people. Further to this may I suggest that BSP through your Division develop a product where those who bank there, especially public servants through their salary has a certain percentages deducted towards future SME startup on separation from their work. This product is not to be used for another purpose, certainly not when they r still employed. I suggest this because many of the participants who ate selected for this training ate former employees of the public n private sectors. This I believe is one of the best strategies to increasing the number of SMEs in the country n would easily contribute to meeting the number of Sam’s the Visit 2050 envisions for 2030.;Cheers…

  3. Tiri Kuimbakul says

    BSP must be commended for the pragmatic approach it has taken. A lot of people want to start small businesses but they lack know-how and capital. Most of these people expect banks to provide them with start-up capital but the banks are reluctant because of the experience they have had that the majority of start-ups fail during the first 5 years of operation. So BSP’s approach of allowing SME owners to start with their own money and trade for the first 12 months is the best way forward.

    The other issue is know-how. I have established that most of the businesses that fail in the first 5 years do so mainly because the owners lack basic business skills. If the owners received some form of basic business training, I think that the risk of failure would be significantly reduced, and therefore the potential for success would be greater.

  4. Wilson N Worimbangu says

    I am currently planning to start up a small business so can you prvide me with necesary informations on processes and procedures involve in it?


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