07/07/2026
Our SME Funding System is Fractured
How do we monitor the funds given to SMEs?
The first question should always be: Who received the funding, and what industry are they operating in?
The Department of Commerce & Industry's SME ecosystem was never designed to hand out money without proper support. It was built around four key agencies, each with a specific role.
1. Small Medium Enterprise Corporation [SMEC], Its role is to train potential and existing SMEs in bookkeeping, financial literacy, business management, and the knowledge entrepreneurs need before entering business.
2. Industrial Centres Development Corporation [ICDC], Once SMEs are trained, ICDC should incubate them by helping them develop products, improve packaging, and pe*****te the domestic market. At the same time, SMEC should continue following up to ensure its training is being implemented. Facilities such as Malahang in Lae and Kokopo were established for this purpose, with plans to expand to Port Moresby and the Highlands.
3. National Institute of Standards and Industrial Technology [NISIT], While SMEs are within the ICDC incubation process, standards must be introduced according to their industry. If you want to export, your products must meet national and international standards, as well as export and import requirements.
4. Investment Promotion Authority [IPA], IPA becomes the bridge between exports and investment. We cannot talk about exports without investment, and we cannot attract investment without products that are ready for the market. Both go hand in hand.
The intended lifespan of an SME within an ICDC incubation centre is about three years before graduating into the commercial market. Unfortunately, this has not been the case since the Namaliu reforms in 1993.
Today, these four agencies appear to have lost their clear direction. Their responsibilities are either overlapping, duplicated, or have been overshadowed by political influence.
I am not even sure whether many of the SMEs that received this funding have ever engaged in value-adding, manufacturing, or exporting.
Commerce & Industry funding was originally intended to grow manufacturing, encourage value addition, and increase exports. It was never designed simply to support roadside or city market vendors without a clear pathway for business growth.
I personally know at least six individuals who benefited from the K200 million SME funding:
Three are my former schoolmates.
Two are politicians whom I know personally.
One is a family member whose honey business I helped years ago to sourcing jars and packaging materials —long before WBD became an MP. And that individual took my advise but never proceeded. I only saw the name in the lists and had to check my email to confirm!
What disappoints me most is knowing that two of the beneficiaries are fellow public servants.
I asked my colleagues and family members, "Yu mekim wanem wok na kisim kain moni?" Shame!
Secretary for Commerce & Industry, this is where the Department should have had a proper monitoring and accountability mechanism in place. These are public funds belonging to the people of Papua New Guinea—not the Minister's money, nor the money of political supporters or anyone else's network.
Before any funds were released, there should have been a clear funding framework:
1. A legally binding contract based on the approved proposal.
2. An initial mobilisation payment of 30%.
3. Proper monitoring, evaluation, and financial audits to verify that the funds were used according to the contract and not diverted.
4. Release of the next 60% only after satisfactory progress is confirmed.
5. The final 10% paid upon successful completion and achievement of agreed outcomes.
Ongoing monitoring to ensure these businesses are genuinely creating jobs, adding value, and increasing exports.
If we are serious about growing Papua New Guinea's SME sector, then accountability must come before politics. Public money should build sustainable businesses—not become another headline.
Note: These are our views on how the SME fundings have been used as a coffee growers, roasters and soon to be roasted coffee exporters
And We are using recent articles from the daily newspapers!
Ken Pep
