Return of PNG Government SME scheme encourages business development


Papua New Guineans aiming to start a small and medium enterprise (SME) have been buoyed by the revival of the previously successful Stret Pasin Stoa Scheme, which adds to the number of programs helping the country develop a small business sector.

The Stret Pasin Stoa Scheme was relaunched in Port Moresby last week with the opening of the National Development Bank Investment Ltd’s (NDBI) first convenience store under the program.

PNG Prime Minister, Peter O'Neill

PNG Prime Minister, Peter O’Neill

According to the NDBI, the purpose of the scheme is to allow indigenous PNG couples to jointly apply for the program, which would eventually see them take ownership of its shops.

Business development

At the opening of its convenience store, the NDBI revealed that, of the 5000 applications received for the first round of the Stret Pasin Stoa Scheme, just 10 were approved.

The scheme has several criteria for selecting applicants, including: eligibility, credit check, examination, training, and business management.

However, it is Prime Minister Peter O’Neill’s desire to open shops for each of the 5000 applicants, with him explaining that it was the government’s challenge over the next four to five years to ensure more Papua New Guineans get into business.

‘We must take up this challenge. We have already done so by putting money into the commercial banks including K100 million to the National Development Bank and K200 million into Bank of South Pacific (BSP) for housing,’ O’Neill said.

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‘This is so that Papua New Guineans do not expect hand outs but go to the bank, borrow, work hard and repay at an affordable rate. Easy money does not last. There were 5,000 applicants and we must open shops for all of them.’

Scheme clarification

The Stret Pasin Stoa Scheme was reintroduced despite some confusion over how the latest version of the program would affect existing SMEs.

Trade Minister, Richard Maru

Trade Minister, Richard Maru

Ahead of relaunching the scheme, Trade, Commerce & Industry Minister, Richard Maru, announced that the program’s revival would enable PNG citizens to buy back small businesses that are supposed to be reserved for Papua New Guineans to manage and own.

Maru said the scheme would see all shops and small businesses currently owned by foreigners bought, managed and operated by PNG citizens over the three years from 2016.

However, O’Neill played down the comments from Maru, saying the statements were ‘unfortunate’. In an interview with Radio Australia, O’Neill explained that Maru’s idea was entirely that of the minister’s and not the PNG Government’s.

‘Richard Maru has got the right intentions to get Papua New Guineans into small businesses and making sure those Papua New Guineans participate meaningfully in those businesses,’ O’Neill said in the interview.

‘The manner in which he made those statements is unfortunate but it’s not the aim of the government to try and stop foreign ownership of investments in the country, but we are trying to target them into areas where Papua New Guineans are not able to do so.’

No consultation

The Port Moresby Chamber of Commerce and Industry (POMCCI) said there had been no consultation with its members in regards to what had been described by Maru.

POMCCI President Ron Seddon told Business Advantage PNG in a statement that the chamber ‘warmly welcomes the PM’s remarks and his clarifications, as the Minister’s comments had caused considerable anxiety among our member companies.’

Seddon explained that 90% of the chamber’s membership of 390 companies could rightly be called SMEs, and most are ‘getting on and making a pretty good go of it’.

‘The Chamber totally agrees with the Minister and the Government that the base of our economy should be in the hands of Papua New Guineans or genuine investors who have made PNG their home,’ Seddon said.

‘But this will not happen overnight and it is actually up to the government of the day to make the environment of the day conducive to SME growth before that can happen.’

Other SME programs

Several other programs have the potential to boost PNG’s SME sector.

Since being founded in 2001, the Ginigoada Bisnis Development Foundation has been providing help to unemployed young men and women in PNG.

By 2011, more than 10,000 young Papua New Guineans had been provided with a sponsored short-term skills development placement through the foundation, while 15,000 men and women had attended its business awareness workshop.

Meanwhile, the Asian Development Bank’s (ADB) US$12.5 million (K33.5 million) Pacific Business Investment Trust Fund has been established to assist Pacific Island countries overcome the challenges constraining private sector growth.

Identifying that factors including the high cost of doing business, inadequate infrastructure and land rights issues were standing in the way of business development, the ADB launched the program in 2014 to support the progress of SMEs throughout the region.


  1. marie waga says

    I’m interested in selling cash crop in my local area but don’t have funds to start up with. Please I need to know more of this information unorder to help me.

  2. Sonja Kamau says

    I would like to start up a small business in East New Britain buying copra from locals and transporting my buys into town to sell to big buyers such as Tropicana, Pacific Lama etc but I need capital and a big Hino 4 tonne truck. Where can I look for help to borrow?

  3. Minister Richard Maru is focused and is viewing this whole SME agenda in the right light.

    Some tough decisions needs to be made – and the ideal time to make those decisions is not in the next decade but now. There will never be another good time.

    We are all mindful how sweet procrastination robs opportunities and consigns people into legislated subjugation and poverty.

    The idea that “all shops and small businesses currently owned by foreigners bought, managed and operated by PNG citizens over the three years from 2016 is the right thinking. The citizens have been writing to the daily papers on this issue for donkey years. Therefore, I don’t see anything dramatic in this approach.
    There is no need for foreigners to be operating fuel/gas stations and little restaurants that can be easily handled by Papua New Guineans.

    We need to adopt the Chinese model that 51% ownership needs to go to the citizens as of 2016 onwards. It is not not early. It is about time.

    There has been a mountain-load of talk-fest on this issue already. It’s action time now.

    POMCCI and others need to articulate and tell us what they have been doing for the past twenty years to develop local entrepreneurship before reacting and scaremongering.

    We have seen a lot of shops ending up in the hands of our friends from the North as prominent businessman Sir Henry Chow clearly says here

    The Prime Minister on the radio interview did not really dismiss his Minister’s views – but he did clarify the need for Papua New Guineans to enter into SME businesses. I have heard the statement. He’s not distancing himself but clarifying the context by saying his Govt supports local SME.

    There’s no better time to do this, than now, when there is political will and the interests of the citizens are pricked.

    Pandering to scaremongers and unfounded fears is not leadership. Bold and decisive action is what the citizens of Papua New Guinea have been crying out for decades.

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