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Papua New Guinea: Supporting Inclusive Finance through the Development of Private Sector Banking

Nonsovereign (Private) Project | 51170-001 Status: Approved

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

Project Officer
Flegler, Paul Robert Private Sector Operations Department Request for information
Country
  • 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
Country Papua New Guinea
Location Nation-wide
Type or Modality of Assistance
7612 Equity Ordinary capital resources USD 10.00 million Approved
Strategic Agendas Inclusive economic growth
Drivers of Change Private sector development
Sector / Subsector

Finance / Finance sector development

Gender Equity and Mainstreaming 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
Concept Clearance 24 Jul 2017
Credit Committee Meeting 15 Mar 2018
Approval 02 Dec 2019
Last PDS Update 06 May 2020

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Evaluation Documents See also: Independent Evaluation

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Related Publications

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