Photo: RIFL's Chief Executive Officer, Peter Boutcher
CEO sets sights on next growth phase for the year after challenging pandemic period in the finance industry.
Established and incorporated by the PNG Banking Corporation in 1979 as Papua New Guinea’s first merchant bank, Resources & Investment Finance Limited (RIFL) is a traditional asset finance business mainly focused on commercial customers. RIFL operated as a merchant bank until it withdrew from the market in the mid to late 1990s.
The company lay dormant over the years before a revival commenced in 2012, resulting in the successful application for a new license and the acquisition and reactivation of RIFL as a licensed financial institution.
The company kept the name RIFL because it still had amity in the business community and in the marketplace. In 2015, the company reached a milestone achievement by issuing 12 million new shares for cash consideration to fund ongoing growth. The business was based primarily on commercial asset finance and has since formalized its appropriate process and structures that have now fallen more in line with traditional finance operations.
Pandemic Period
Despite the pandemic’s severe economic impacts on Papua New Guinea’s financial institutions, RIFL achieved steady revenues and profits in 2021. PNG Business News recently sat down with the company’s Chief Executive Officer, Peter Boutcher, to discuss its successes and plans for growth.
Boutcher has spent the last 30 years working in PNG and is also a citizen of the country. As a seasoned banker, he has gained vast experience and has a broad understanding of the county’s financial sector while he held top posts with ANZ and Bank South Pacific (BSP) over the years prior to his current role as the CEO of RIFL.
While his current focus is establishing RIFL’s clientele base and profit margin, he revealed that for the past 12 months post-Covid, the company has also focused on its staffing, loan documentation, policies, and procedures, at the same time building a predominantly commercial equipment finance portfolio.
“Covid gave us a great opportunity to focus internally, looking at our own processes, procedures, and our own policies on all aspects including equipment financing, financial reporting and administration, business development, operations, systems, credit risk management, policy and procedure development and training of personnel,” he said.
“We are progressing to get all these things right as we do have to be compliant because we come under the guidelines and oversight of the Bank of PNG, so from a prudential point of view our greatest achievement post-Covid was focusing on our company’s mechanisms and how well we could be able to adapt our services within this period,” he added.
“It has been a struggle with Covid as a lot of our clients had issues, especially with trucking and logistics as a lot of provinces had closed their borders, and moving between these provinces became problematic for some of our clients. Travel bans were imposed and that put a lot of pressure on a lot of people over a period of time.”
“On the bright side, we sat down with these businesses and have guided them through this period and most of them are now starting to reestablish the business that they had. As mentioned, it’s also been a fairly tough twelve months post-Covid and currently, we’re exploring new markets and those existing areas that haven’t been completely dominated by other industry players,” Boutcher said.
Focus & Strengths
RIFL is focused on four core financial aspects: Asset Finance, Insurance Funding, Financial Leasing, and Personal Loans. Their services range from providing equipment finance for commercial and consumer purposes, including motor vehicles, trucks and earth-moving machinery, and mining and construction equipment. They also specialize in funding technology assets like information technology and office equipment, software, and telecommunications.
“We want to be a market leader in finance, with a healthy loan book and a steady growth rate over the years to come. Our response to clients is a serious priority for us. We have a strong customer base, and we ensure they are given a good turnaround time for their investments,” Boutcher said.
“We have been doing quite well with term deposits which ensure that our clients get a guaranteed rate of interest, and our growth phase is now more aligned in embarking and venturing more into this financial aspect.”
"RIFL has already grown from a small finance company over the years to a well-known competitor in the finance industry. It is important that we strengthen the management to ensure we have the necessary governance and compliance and appropriate human resources to continue this upward trend,” Boutcher said.
Growth Phase
In proceeding with the growth and expansion of its services, RIFL has ensured that risk and security measures including collaterals are in place. Although risks are being taken, they are calculated based on the serviceability and sustainability of loans.
“We are a small organization, but we also have many years of data that we can use to assess and mitigate risks. PNG is a tough lending environment, and it comes with its own challenges, however, we must persevere with our businesses,” Boutcher said.
RIFL have also been looking at growing the business, particularly with established SMEs to help them grow, consideration had been given to several SMEs and local companies that they have funded into various projects, especially in road and construction projects.
Others have diversified into agricultural projects such as palm oil, coffee, and other sectors such as shipping, but the goal is to spread the risk by investing with established SMEs instead of being too reliant on a few multi-corporate clients. That’s a significant part of the finance company’s strategy going forward.
“From a business perspective what we’re looking at is financing heavy equipment trucks and machinery, but we have also been keen on assisting people with working capital requirements, consumer lending to people in the management level who are looking to create self-wealth or those who are willing to buy motor cars, white goods, and brown goods,” Boutcher said.
“Another aspect is to look at retirees in both the public and private sector and offer long-term deposits with good interest rates and pay monthly interest similar to a pension.”
“So, for retirees opting to invest with us who have superannuation funds from K200,000 can get a constant income in their retirement. That is something that we are looking to embark on this year and hopefully attract a lot of those retiree funds, as the banks pay relatively low rates on investments,” Boutcher explained.
Expected Outcomes
RIFL’s progress in maintaining their clients has been great as they have had some long-term loyal clients although some have had financial difficulties. The finance company has been able to go through a process with these clients by working with them based on their current and future contracts and then determining a way forward.
“In the future, we would like to get to a stage where we are considered the premiere finance company in PNG and tap into the superannuation of retirees to try and help them, and also help us as well, because if they invest with us that will help us with our funding,” Boutcher said.
Previously RIFL took a different approach in program alliances with vendors and committed sponsorships within the community and sports. But now they have made a collective decision and have decided to invest more into branding and brand awareness and have been progressing quite well.
“Operations of the company depends on going out and engaging with our clients so since we are a finance company based in Port Moresby, one of our focuses would be to give more emphasis on clients outside of the city in other provinces,” he said.
“Some (clients) get into situations where they need to sell assets whether that be machinery or property to try and reduce the debt burden and we try to support them as best as we can through those times,” the RIFL chief said.
“We are open to new business as well as new challenges. For us, we want to continue to grow the business and have a long-term relationship with Papua New Guineans as a finance company, so what we are looking at is continued and controlled growth,” Boutcher ended.
