FIVE years on, a $3million government Small and Micro Enterprise credit guarantee, ANZ is bursting to grow its SME portfolio.
With about $210million of SME funds in management (lending and deposits), 1 per cent bad loan rate, head of Business Banking and acting chief executive officer, Rakesh Ram said they were ready to expand this portfolio.
In the last eight months, ANZ has lent over $8.8m to SME's with another $8.4m in the pipeline. Loans currently stand at $50m, which means at least $160m are in deposits.
Mr Ram said the 1 per cent bad loan rate was both good and bad. It was good, Mr Ram said, because it showed the bank's success in assisting SMEs as they started or expanded.
But from a personal perspective, he said, it also showed that the bank was conservative considering that globally, the bad loan rate for SMEs was between 5 to 10 per cent.
"We were the first bank in Fiji to have a dedicated SME department," Mr Ram said.
"Now, we have 20 staff dedicated to the SME sector, we have small business managers in major centres and a team of 15 to 20 people at our Pacific Operations in Kalabu who look after small business applications."
Since, the SME department started five years ago, the bank now boasts over 8000 clients with businesses in various sectors.
"We also have a Specialised Business Portfolio with the creation of an Asian Banking and NGO/NPO Portfolio to focus on these markets as both contribute tremendously towards SME development in Fiji," Mr Ram said.
"We stand ready and committed to providing additional lending to small and medium-sized (SME) businesses.
"This additional lending will be designed to help existing and new SME customers build and develop their business. The new lending will give customers access to business-related loans in order to support investment or expansion opportunities."
ANZ national manager SME, Abdullah Fazil Hamza said they offered financing to anyone that wanted to start a business in any sector.
He added the bank had created a simplified SME loan application. The interest rate on these loans depend on the "risk" of the applicant but would be not more than 10 per cent. The government's credit guarantee scheme, Mr Ram said, could be used as security for applicants who did not have security, equity or capital.
"If we see an application and feel it should be registered under the scheme, we would do so," Mr Ram said.
ANZ will also run workshops across Fiji.
Meanwhile, Finance Ministry permanent secretary Filimone Waqabaca said SMEs were the bedrock of an economy.
When there is a crisis, and the bigger companies "pack and go", it is the SMEs that hold the economy together.
Mr Waqabaca said SMEs should be supported as they would create employment, which would lead to economic growth.
Reserve Bank of Fiji governor Barry Whiteside said lending institutions, such as ANZ, played a crucial role in providing funds that allowed SMEs to function, expand operations, generate employment and produce export receipts or goods for our local market. Both outputs, he said, benefit our foreign reserves position.
"The newly introduced Credit Guarantee Scheme is part of our goal to improve SME access to finance and at the same time enable lending institutions to share part of the risk with government," he said.
"Public and private sector partnerships such as these are exactly what our country needs to boost domestic growth and improve our overall economic wellbeing.
"An advantage of the above scheme is that it can be used in conjunction with current loan schemes, including existing flood rehabilitation facilities to alleviate collateral requirements for flood affected SMEs."