Small, medium and micro enterprises say that better access to finance will deliver the biggest boost to their business, according to one of the biggest-ever studies of the sector in PNG.
The survey was commissioned by Australia to support the Government of Papua New Guinea, with its goal to pursue policies that spur Micro, Small and Medium Enterprise (MSME) sector growth.
The ‘MSME and Informal Sector Survey’ findings show that business owners and managers have said easier access to loans, credit and other finance would be the most effective change to improve their business.
The survey of 2,621 enterprises across 21 provinces found that more than half (56 per cent) experienced difficulties getting a loan, including almost a third (31 per cent) who said it was a major obstacle to doing business.
The MSMEs surveyed said more could be done to unlock their growth potential, with 60 per cent of respondents to the survey, stating that having improved access to finance is among the top three of a wish list of ‘most helpful changes’ that could be made.
Almost 40 per cent said that there needed to be better access to management and financial skills training.
Access to finance is not the only challenge MSMEs face. Almost half (48 per cent) also reported that climate change was impacting their business, mainly the effect of increased rainfall in deterring customers, disrupting transport and causing service outages.
At the same time, more than a third said they suffered property damage, temporary business closures, transport disruptions and other costs from the looting, vandalism and security issues associated with the Black Wednesday unrest.
Those who reported to be most heavily affected by the unrest were in the Highlands and Southern regions, while MSMEs in the Islands and Momase regions reported much less impact.
But, despite these and other challenges, MSMEs were overwhelmingly optimistic about their future prospects.
Almost 80 per cent expect business and sales to improve over the next 12 months and almost two-thirds (64 per cent) plan to hire more staff.
The survey’s findings will help inform PNG government policies and actions to support the MSME sector and drive employment and economic growth.
The preliminary survey findings were presented at a workshop involving government officials, business leaders, researchers and private sector representatives in Port Moresby on 7 August 2024.
Survey fieldworkers interviewing micro and small enterprise owners and managers as part of the Australian Government funded study of MSME challenges faced in PNG.
For further information, including access to related materials, please contact the Australian High Commission media team: +675 7090 0100