By ORCHY REX
The Youth Empowerment Foundation (YEF) in partnership with MiBank is reaching deeper into rural communities to empower informal sector operators through access to banking and credit services, with the aim of contributing to the Government’s target of establishing 500,000 SMEs by 2030.
Speaking at the MiBank account opening booth in Rigo over the weekend, YEF president Robert Yori Thomas said the foundation was aligning its vision to the government’s SME goals by targeting the informal sector, where the bulk of Papua New Guinea’s population survives.
“At the moment, as we know, the government would like to have 500,000 SMEs by 2030 and create one million jobs. It is our vision as an NGO to align to that target,” he said.
Mr Thomas said YEF has signed two agreements with MiBank, a Credit Scheme Agreement and an Agent Agreement, both designed to bring financial services closer to everyday Papua New Guineans.
“Our first agreement is a credit scheme agreement, where we give credit to informal sector operators. The current emphasis is on the formal sector, which is good, but the informal sector, where our table mothers, our farmers, our trade store owners, and poultry farmers are, should also be taken into consideration,” he explained.
He added that unlike commercial banks, YEF was going into areas considered “not commercially viable” to bring banking services closer to people.
“When you look at the banks, they are commercially sensitive. They go to places where there is commercial viability. But we, as NGOs, we are the hands and the legs of the government and private sector. We are going into rural areas because we are for the people,” Mr Thomas said.
Under the program, YEF has already opened more than 1,000 bank accounts for informal sector operators in Port Moresby settlements and issued over K400,000 to more than 50 small business operators.
One of the beneficiaries, Mau Varo of Rigo, received K5,000 to expand his trade store. He has also been set up as a MiBank sub-agent in his village, allowing locals to deposit and withdraw funds without traveling to Port Moresby.
“For us coming here is that Mou Varo is one of our recipients. He will be our sub-agent where those that have opened accounts can just come and do their deposits and withdrawals through him in the village,” Mr Thomas.
He explained that YEF employed a community-based filtering process to reduce risks before recommending clients for loans.
“We have cluster groups at the community level. Those cluster groups recommend them to us, and we further recommend them to MiBank. If anything goes wrong, it’s the cluster group that will be responsible for repaying,” he said.
An informal sector mother in Rigo expressed gratitude to YEF and MiBank, saying the initiative was life-changing for mothers and families in rural areas.
“This will help us keep our savings and withdraw anytime we need money. Withdrawals are done using our registered mobile phones so it is easy for us to do it anytime at home,” she said.
Mr Thomas called on more public-private-NGO partnerships in the SME space to help transform lives, particularly in rural PNG.