Medium Term Development Plan, 2011-2015 - UNDP in Papua New ...

4.7 Small and medium enterprises
Goal:
Develop and promote small an d medium enterprises
Introduction
Economic growth based on extracting natural resources is unsustainable in the longer term. Therefore there
needs to be a strong focus on developing other sectors of the economy through the private sector and small
and medium enterprises (SME) in particular. SMEs are vital if PNG is to realise development that is broadbased
and sustainable. SMEs generate enormous benefits at many levels, such as jobs and wealth creation.
They also help to promote self-reliance and reduce poverty by supporting sustainable livelihoods.
The development of SMEs in PNG has not been robust due to policy, institutional, environmental and
structural impediments. In promoting SMEs, the Government has to create an enabling environment and
improve support services. Currently, the number of SMEs in PNG, which mostly comprises of tucker shops
(48%), is 16,500. None of these SMEs unfortunately are involved in overseas operations.
MTDP 2011-2015
The first MTDP 2011-2015 will set the policy and legislative framework to establish an enabling environment
for SMEs to prosper. It will focus on reviewing and improving the existing SBDC Act 1990, SME Policy 1998
and trade policies with a view to facilitate an export driven focus and SME promotion. In addition to
developing robust SME policies and establishing the legislative framework to guide the growth of SMEs, the
MTDP 2011-2015 also aims to build capacity through existing training programs such as “Know About
Business” (KAB), “Start, Improve your Business” (SIYB), SIC and “Women in Textile Training.” Compared to
baseline data of 16,500 SMEs employing 82,500 people, the first MTDP has a set target of achieving 21,000
SMEs employing 105,000 people by 2015, with 3 SMEs operating overseas by 2015.
The SBDC is the Government’s support agency under the coordination of the Department of Commerce and
Industry (DCI) in promoting SME development.
Building on MTDP 2011-2015
Subsequent MTDPs will focus on achieving the targets set for 2015 and onwards with the sector strategies
identified in the PNGDSP 2010-2030 to promote SME development. They will play a vital role in improving
support services for SMEs, drawing from the deliverables outlined in the first MTDP 2011-2015. Under the
existing business development programs of SBDC, successive MTDPs will continue to improve SMEs access to
credit finance, with the expansion of microfinance facilities across the provinces. There will also be increased
marketing and promotion of SMEs towards a competitive industry that is able to participate in a globally
challenging environment.
Subsequent MTDPs will enable creation of jobs, wealth and sustainable livelihoods in reducing poverty and
promoting self-reliance, thus ultimately achieving the overarching goal of the PNGDSP 2010-2030 which is “a
quality of life for all Papua New Guineans”.
Challenges in implementation
There are several constraints that will impinge on development and growth of SMEs. These are identified as:
· lack of human resource capacity and development;
· lack of information dissemination and knowledge of business opportunities;
· lack of access to markets and financial credit;
· lack of financial and appropriate technological resources;
· lack of adequate infrastructure;
· policy incoherence; and
· complexity of administrative procedures.
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