Council calls on govt to allocate funds for SMEs in budget

THE Micro Small Medium Enterprise (MSME) Council has suggested to the Government to allocate further funding for small-medium businesses in the 2021 national budget.
It suggested to have an allocation for capacity building and financial literacy, funding for the credit guarantee corporation, funding for cooperative societies and to continue the freight subsidy programme.
Council president Desmond Yaninen said the credit guarantee corporation was approved in 2018 and funded in 2019 but was yet to be launched.
Yaninen said cooperative societies came under the Commerce and Industry Department.
He said the number of informal businesses joining the formal sector could increase with the K200 million funding.
Government has paid K100 million to the Bank South Pacific (BSP) and will soon give K80 million to the National Development Bank (NDB).
“We will start to see a growth in the number of formal sector SMEs,” Yaninen said.
“The reason is that Prime Minister (James Marape) and Commerce and Industry Minister William Duma have put in place requirements that all SMEs be registered if they want to access loans.
“They need to have Investment Promotion Authority registration.
“They need to register with the Internal Revenue Commission and get a Taxpayer Identification Number (TIN).
“If they are in small groups, they need to register as corporative societies because there are conditions to these loans.
“One is to register with IPA, IRC or through corporative societies,” he said.
“That’s going to mean that a lot of people will be forced to move from the informal sector to the formal sector to access a SME loan.”