PORT MORESBY, PAPUA NEW GUINEA (3 December 2019) — The Asian Development Bank (ADB) has made a $10 million equity investment into Kina Securities Limited (KSL), a fast-growing financial services company in Papua New Guinea (PNG). The investment will help to increase the availability of sustainable financial services and support inclusive growth in the Pacific island country.
KSL is one of four banks operating in PNG, where an estimated 70% of the population does not have a formal bank account. Through its largest operating division Kina Bank, KSL is one of only two domestic banks catering specifically to the country’s underserved segments including local small and medium-sized enterprises (SMEs) and the growing middle class.
ADB’s investment will help Kina Bank to establish correspondent banking relationships that make it easier for its domestic SME clients to trade with their customers, and to attract future debt and equity investments. These are areas that have been challenging for banks in PNG. As its only development finance shareholder, ADB will also support Kina Bank on financial inclusion initiatives as part of its business.
“This transaction is an important milestone in our efforts to promote financial inclusion in Papua New Guinea,” said ADB Director General for Private Sector Operations Mr. Michael Barrow. “With its focus on SMEs, along with the high employment potential that comes with developing this segment, KSL is helping to create the conditions for inclusive growth. We look forward to supporting the bank’s continued efforts to boost access to sustainable financial services in PNG.”
KSL Chief Executive Officer Mr. Greg Pawson said: “The investment by ADB is a great development and endorsement for the group and for Kina, its customers, and shareholders. Attracting an investment by ADB represents a key endorsement of our 5-year strategic plan. The reputation, strength, and capabilities that ADB brings will enable us to better deliver on our purpose of empowering our customers and communities to have financial independence and security.”
In addition to the equity stake, ADB will provide technical assistance. This will help to strengthen KSL’s governance and risk management systems, including on environmental and social management.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.