The provincial government of Enga has signed a memorandum of understanding for a K 1 million credit program with the National Development Bank.
The program will allow Enga’s small farmers to access finance.
NDB Director General Moses Liu said the Enga Province Credit Guarantee Program (EPCGS) was set up to provide concessional business loans to local individuals or groups of businesses. existing or potential.
He said it is with the ultimate goal of helping and promoting the ordinary Engans micro-enterprises which are striving to participate in business activities in the province.
The provincial government of Enga will be the guarantor of the loan funds granted to businessmen and women by the National Development Bank Limited under the loan guarantee program of the province of Enga.
According to the agreement signed yesterday, EPG will provide an initial deposit of K1 million to the Bank which will be held as collateral in a trust account for the people of Enga under the loan guarantee program of Enga province.
The Bank will lend up to 90 percent of the funds held under the Enga Province credit guarantee program with the Bank and 10 percent will be used for the costs of administration and management of the program by the Bank. .
– A simple interest rate of 6.5 percent will apply to all loans under the Enga Province Credit Guarantee Program.
– Applicants will provide 20% equity capital as a contribution to the project.
– The minimum loan under the program will be 1,000.00 K and maximum 5,000.00 K
– Those with a proven track record in small businesses and start-ups who can meet loan requirements with cash flow evidence demonstrating their ability to repay the loan over the life of the loan will also be encouraged.
– Loan monies will be paid directly to suppliers, who provide materials and goods for the borrower’s project. The loan money should not be returned directly to the borrower, in order to avoid misuse of the funds.
– Loan repayments will be spread over a maximum period of two years depending on the cash budget.