THE Centre for Excellence in Financial Inclusion (CEFI) and the Credit Guarantee Corporation PNG (CGC) have signed a Memorandum of Understanding (MoU) that marks an important step towards strengthening financial literacy, business capability and access to finance for Micro, Small and Medium-Sized Enterprises (MSMEs) across Papua New Guinea.
The agreement formalizes a longstanding working relationship between the two organisations and establishes a framework for delivering financial literacy programmes, entrepreneurship training, business development support and a referral pathway for MSMEs to access finance through CGC’s partner financial institutions.
The partnership also aligns with the Government’s broader financial inclusion agenda by equipping entrepreneurs with the knowledge and practical skills needed to build sustainable businesses while improving their ability to secure finance through formal financial institutions.
Under the MoU, CEFI and CGC will jointly deliver financial literacy and capacity-building programmes, promote entrepreneurship skills, banking and financial management skills, and carry out awareness of each organization mandate in access to finance and financial inclusion.
The key outcome of this agreement is established a referral pathway for start-up businesses.
The partnership will commit both organisations to collaborate on awareness campaigns, business development initiatives to support the MSME sector.
Speaking at the signing ceremony, CEFI Acting Executive Director Peter Samuel said the growing number of MSMEs accessing financial services made it increasingly important to ensure business owners were equipped with sound financial management skills.
“As CGC’s portfolio continues to grow, so too does the number of MSMEs participating in the market,” Mr Samuel said.
“However, increased participation does not necessarily mean that all beneficiaries are adequately trained or well equipped to manage their businesses. Our objective is to ensure that recipients of guaranteed facilities are equipped with the knowledge and skills needed to manage their businesses effectively, maintain proper financial records and avoid the risks associated with poor financial management.”
Mr Samuel said the partnership would allow CEFI to complement CGCs credit guarantee facility with practical capacity-building programmes, including its Business Essential Skills Module, Digital Financial Literacy Module and existing financial literacy programmes on budgeting and savings.
He said the collaboration would provide a stronger support system for entrepreneurs by combining access to finance with business incubation and financial education.
“The Government continues to emphasize the importance of supporting MSMEs. However, support must go beyond financing alone. We also need clear pathways that provide incubation, capacity building and business acceleration programmes to help MSMEs become sustainable and contribute meaningfully to economic growth,” he said.
Credit Guarantee Corporation Chief Executive Officer Dominic Sikakau described the MoU as the formalisation of an already successful partnership.
“We have already collaborated on a range of initiatives, so today’s Memorandum of Understanding simply formalises a relationship that has existed for quite some time,” Mr Sikakau said.
He noted that one of the greatest challenges facing CGC’s guarantee programme was loan defaults, often resulting from a lack of business knowledge and financial management skills among borrowers.
“Through our partnership with CEFI, we hope to strengthen the capacity of MSMEs by equipping them with the
knowledge and skills to manage their finances effectively, build sustainable businesses and ultimately reduce the risk of default,” he said.
Mr Sikakau also highlighted the role of CGC’s Loan Referral Platform, which enables MSMEs to submit loan applications online to participating financial institutions. He said incorporating the platform into CEFI’s financial literacy programmes would improve awareness and accessibility, particularly for entrepreneurs in rural and remote communities.
The MoU represents a shared commitment by both organisations to create stronger pathways for entrepreneurs, reduce barriers to finance and contribute to long-term private sector growth, financial inclusion and socio-economic development across the country.