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In Morobe Province, Papua New Guinea, a group of women produce growers will soon be able to access the finance they need to increase their productivity and grow their businesses, thanks to an innovative new loan product from Women’s Micro Bank (WMB), delivered in partnership with NKW Fresh Produce and supported by PSDI. 

These loans are among the first of their type to be offered in PNG, and allow WMB to offer finance to women who are unable to provide the kind of security that commercial banks normally insist on – such as land, buildings, or payroll deductions. The new product instead uses the women’s supply contracts with NKW Fresh as collateral, and will allow them to access up to K20,000 for income-generating purposes.

Above: Representatives from Women’s Micro Bank, NKW Fresh, Australian Department of Foreign Affairs and Trade, and Asian Development Bank’s Pacific Private Sector Development Initiative attend the signing.

A Memorandum of Agreement (MOA) to begin a trial phase of the new product was signed yesterday in Lae between WMB and NKW Fresh. During this phase, a group of around 20 women produce growers – who have an existing supply contract with NKW Fresh – will be able to borrow up to 90% of the purchase price of a small, walk-behind tractor. With these tractors, the growers will be able to cultivate larger plots of land, helping to increase their yields and improve their incomes. NKW Fresh will also provide training and support for the use and maintenance of the tractors.

At the MOA signing, Mr Gunanidhi Das, CEO of WMB, and Mr Geoff Baker, Commercial Manager of NKW Fresh, emphasized the significant impact that increased income for women can have on family welfare, as well as the important role of the agriculture industry in PNG’s food production and economy. He identified these as driving factors for WMB to provide support to women and the broader agriculture sector through the provision of easy access to finance. WMB and NKW Fresh are hoping that the provision of this finance will lead to an economy of scale for agri-value chain businesses, and the improved incomes that come with the anticipated increase in yields will result in a sound savings culture and increased financial independence for loan recipients and their communities.

PSDI worked with WMB and NKW Fresh to identify the potential of this financing application and develop the product, and will provide ongoing assistance for the product’s launch and full implementation.

This type of loan product is made possible by the secured transactions framework, which was developed and implemented by the Government of Papua New Guinea, with full technical assistance by PSDI. The framework was established through the development of the Personal Property Security Act 2016 and the launch of an online Personal Property Securities Registry.

PSDI is also working with other lenders throughout the Pacific to identify and develop potential similar applications to provide financing to established value chains using movable assets as security, particularly targeting sectors who traditionally struggle to access finance, such as agriculture and fisheries.

Above: Employees of NKW Fresh sort produce during a warehouse visit for the signing of the MOA.