Papua New Guinea : Supporting Inclusive Finance through the Development of Private Sector Banking
ADB funding consists of an equity investment of up to $10,000,000. The investment will be in the form of new equity, and ADB is expected to have an ownership stake of approximately 6%. The shares to be acquired by ADB will be denominated in Australian dollars and listed on the ASX. ADB is expected to provide capacity building TA to help strengthen governance and risk management; implement an environmental and social management system (ESMS); and develop Kina Bank's digital service delivery channels and SME finance business, including women-owned SMEs.
Project Details
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Project Officer
Flegler, Paul Robert
Private Sector Operations Department
Request for information -
Approval Date
2 December 2019 -
Country/Economy
Papua New Guinea -
Sector
- Finance
| Project Name | Supporting Inclusive Finance through the Development of Private Sector Banking | |||||
| Project Number | 51170-001 | |||||
| Borrower / Company | Kina Securities Limited |
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| Country / Economy | Papua New Guinea |
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| Location | Nation-wide | |||||
| Type or Modality of Assistance |
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| Operational Priorities | OP1: Addressing remaining poverty and reducing inequalities OP2: Accelerating progress in gender equality OP4: Making cities more livable |
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| Sector / Subsector | Finance / Finance sector development |
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| Gender | Some gender elements | |||||
| Responsible ADB Department | Private Sector Operations Department | |||||
| Responsible ADB Division | Private Sector Financial Institutions Division | |||||
| Responsible ADB Officer | Flegler, Paul Robert | |||||
| Project Sponsor(s) | ||||||
| Description | ADB funding consists of an equity investment of up to $10,000,000. The investment will be in the form of new equity, and ADB is expected to have an ownership stake of approximately 6%. The shares to be acquired by ADB will be denominated in Australian dollars and listed on the ASX. ADB is expected to provide capacity building TA to help strengthen governance and risk management; implement an environmental and social management system (ESMS); and develop Kina Bank's digital service delivery channels and SME finance business, including women-owned SMEs. | |||||
| Objectives and Scope | ADB funding consists of an equity investment of up to $10,000,000. The investment will be in the form of new equity (through a fresh issuance of shares), and ADB is expected to have an ownership stake of approximately 6%. | |||||
| Linkage to Country/Regional Strategy | The project will contribute to the following operational priorities of Strategy 2030 (i) addressing remaining poverty and reducing inequalities and (ii) accelerating progress in gender equality. Kina Securities Limited's (KSL) focus on serving the local SME segment, which has high employment potential, and the emerging middle class will help build the conditions for inclusive growth. The partnership with ADB will help KSL better serve these segments. This is consistent with the government's efforts to promote inclusive growth and with the governments Financial Sector Development Strategy, 2018-2030. It is also consistent with ADB's country partnership strategy for PNG, 2016-2020 to promote private sector development. |
| Safeguard Categories | |
|---|---|
| Environment | FI |
| Involuntary Resettlement | FI |
| Indigenous Peoples | FI |
| Summary of Environmental and Social Aspects | |
|---|---|
| Environmental Aspects | KSL and its wholly owned subsidiaries will screen all loan applications against ADB's Prohibited Investment Activities List (PIAL). KSL and its sub-borrowers will comply with national laws and regulations and also with ADB's Safeguard Policy Statement (SPS, 2009) requirements. Environment category A projects will be excluded from KSL operations. KSL will establish and maintain an appropriate ESMS framework satisfactory to ADB on subscription. ADB will work with KSL to develop and implement an ESMS commensurate with identified risks and impacts associated with KSL sub-borrowers' business operations. |
| Involuntary Resettlement | The activities of KSL's financial services provider subsidiaries are not expected to cause involuntary resettlement impacts. KSL reported, and ADB validated during due diligence, that no preexisting Kina Bank loans were for business activities causing category A involuntary resettlement impacts. All large corporate loan applications are assessed for compliance against national laws and regulations. Through application of the environmental and social management system framework and subsequently the ESMS, activities having category A involuntary resettlement impacts will be excluded from KSL's operations. |
| Indigenous Peoples | The project is not expected to entail any significant impact on indigenous peoples. |
| Stakeholder Communication, Participation, and Consultation | N/A |
| Timetable for assistance design, processing and implementation | |
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| Concept Clearance | 24 Jul 2017 |
| Credit Committee Meeting | 15 Mar 2018 |
| Approval | 02 Dec 2019 |
| Last PDS Update | 06 May 2020 |
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
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| Title | Document Type | Document Date |
|---|---|---|
| Supporting Inclusive Finance through the Development of Private Sector Banking: FAST Report | Faster Approach to Small Nonsovereign Transactions | Dec 2019 |
| Supporting Inclusive Finance through the Development of Private Sector Banking: Initial Poverty and Social Analysis | Initial Poverty and Social Analysis | Oct 2019 |
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
None currently available.
Evaluation Documents See also: Independent Evaluation
None currently available.
Related Publications
None currently available.
The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
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