Need raised for informal sector to embrace new culture

Business

Papua New Guinea has a huge informal sector but it is disconnected from the formal sector, according to the Bank of Papua New Guinea.
“We need them to have bank accounts and connect with digital finance,” said the bank’s assistant governor, Elison Pidik, outside the Asia Pacific Economic Cooperation senior finance officers’ meeting in Madang yesterday.
Pidik said that in the country’s huge informal sector people were involved in a lot of economic activities.
Having a bank account and connecting to digital finance like phone banking helped people to do business effectively, efficiently and conveniently, he said.
He said studies and experiences showed that most people involved in the informal sector did not keep records of what they earned and spent and they certainly did not save for the future.
There was a need to address that issue so that saving became a habit and a way of life for people, he said.
Pidik was asked if the informal sector fitted into the SME spectrum.
He said that while the SME played an important role because the informal sector actually involved small businesses, those informal sector small businesses needed to build their capacity, capability and financial management.
“There is a need for government support because it translates a lot of government sector dicisions,” Pidik said.

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