THE public service agencies tasked with promoting business development or entrepreneurship have had a history of failure, a former staff says.
Emmanuel Raussi, who is now a trainer-coach at the Human Development Institute (HDI) says the Department of Commerce and Industry through its SME Corporation is still faced with issues that need to be sorted out before it can function successfully.
Over the years, the department has tried several schemes or programmes to help Papua New Guineans to become businessmen and women but all have apparently failed.
These include the cooperative society movement of the 1960s and 1970s, the Village Economic Development Grants scheme in the 1970s and 1980s, and the Credit Guarantee Scheme in the late 1990s.
Speaking during a graduating at the HDI last Friday, Raussi shared his experience with the Department of Commerce and affiliated agencies from 1977 to 1996.
He graduated from University of PNG in 1976 with a Bachelor of Education Economics and Geography. He worked as a business development office with the Department of Commerce from 19778 to 1988, was head of Business Development Studies at what is now the Pacific Institute of Leadership and Governance, was involved in the study by Prof Jeffrey Meridith, that led to the establishment of Small Business Development Corporation (SBDC) in 1972, was manager of Micro Enterprises at SBDC from 1993 to 1996.
He was also instrumental in bringing on board the Start Your Business (SYB) programme in the country.
From his years of experience, Raussi points out that there are very critical reasons why government agencies tasked with business development had failed over the years.
Some of these are:
- Government officers work on a supply-driven system while business is demand driven;
- Officers lack business class thinking, business knowledge and business practice;
- There is really no business system to promote and grow SMEs;
The focus on business development is putting the cart before the horse. Development of the entrepreneur must take precedence over developing the business, Raussi says.
“For entrepreneur and business development there must be a system in place to measure business performance and growth to a certain number of indicators including return on investment and the contribution of MSMEs overall to the PNG economy
“Public service work plans are based on KPIs measuring internal deficiencies. If the focus is on helping MSMEs, the measurement should be on strike rates to the graduation of MSMEs achieving various levels of growth
“MSMEs need coaching to help them master business class thinking and skills. To leave them to their own devices in incubation centres in a recipe for disaster.”
Raussi is also questioning why the Government’s K200 million MSME funding is parked at commercial banks, saying that small entrepreneurs might not qualify for such assistance because of criteria set by the banks.
He suggests that some portion of funding be given to micro banks so more small businesses can access it.
He says that if some of that money were given to the Women’s Micro Bank for example, its customers could access it to develop their business. The HDI and Women’s Micro Bank have a standing agreement under which those trained by HDI will be given loans to grow their businesses.
With the HDI’s Personal Viability Business Scheme (PVBS) training, they will be in better stead to run their business and repay any loans.
Last Friday three different groups graduated at the HDI: Level 2, Level 3 and PVBS coaches.
Among them was former senior public servant Ruby Zarriga who attained a Level 3 certificate.