The National Development Bank under its subsidiary NDB Investment in 2012, re-established the small to medium enterprise (SME) scheme to enable citizens to buy and own businesses reserved specifically for them. Business Reporter JACKLYN SIRIAS discussed the scheme with National Development Bank Investment Limited board chairman MOSES LIU.
SIRIAS: What are the investment initiatives or programmes NDBI is offering?
LIU: The focus for NDBI is to provide the Stret Pasin business programmes for Papua New Guineans to be engaged in small businesses through three main investment initiatives.
- Entrepreneurship loans with competitive interest rates and concessional lending conditions to start their small businesses;
- Youth enterprise scheme for school leavers to be trained to operate their small businesses; and,
- Business Incubation Centres to assist Papua New Guineans engage in small businesses at affordable rental rates.
SIRIAS: Why does the government encourage such business schemes?
LIU: The government is encouraging more Papua New Guineans to be engaged in economic activities to grow the economy.
They can do that by engaging in small businesses. Currently, only 10 per cent of the gross domestic product (GDP) is contributed by the SME sector. By 2030, the government expects the sector (which includes agriculture, tourism and fisheries) to contribute up to 70 per cent of GDP.
The growth of the SME sector has the potential to create two million new jobs in the next 10 years.
SIRIAS: What are some of the challenges faced by NDBI in meeting the government’s aim?
LIU: The main challenge is that NDBI is unable to roll out the programmes and other innovative products throughout the country due to financial constraints.
The demand for such programmes is high in the country.
SIRIAS: Do those initiatives or programmes go in line with the bank’s aims and policies?
LIU: These initiatives or programmes are in line with the bank’s aims and policies, which is to empower locals to be engaged in small businesses to advance economically and improve their living standards.
SIRIAS: The Investment Promotion Regulation 1992 outlines small businesses reserved for Papua New Guineans. But Asians have come in to operate them, for example kai bars. Can the Stret Pasin Business Incubation Scheme address that?
LIU: Yes. Through the Stret Pasin Business Incubation Scheme and the bank’s provision of affordable loan products to Papua New Guineans, they will operate small businesses that are reserved for locals only.
SIRIAS: Does the NDBI have any plans to recruit more couples under the Stret Pasin Store scheme?
LIU: Yes. With adequate funding, NDBI will recruit couples to engage in small businesses including retail outlets that Papua New Guineans are capable of operating.
SIRIAS: What are other benefits for entrepreneurs of the Stret Pasin Business Incubation Centre apart from providing spaces for them to operate their business?
LIU: Entrepreneurs will have the opportunity to try out new concepts and innovative methods of doing business.
SIRIAS: Are there plans for more expansions to other centres in Papua New Guinea?
LIU: There are plans to expand to other centres as well after trialling this concept in Port Moresby.
SIRIAS: How much has been spent on those initiatives so far?
LIU: NDBI has invested close to K1 million in the Port Moresby and Goroko Business Incubation Centres.
SIRIAS: Do you think Apec 2018 will have positive impacts on local entrepreneurs and the NDBI business schemes?
LIU: Apec 2018 will have positive impact on a lot of our customers and other local entrepreneurs as they will be able to showcase their products and services during this important event.