In the 1970s, 1980s, and 1990s, the government-owned National Development Bank (NDB) ran the stret pasin stoa program that provided credit, entrepreneurship training and business management skills to support Papua New Guineans to own and manage trade store (retail) businesses. It is not clear how many trade stoa companies were started but by 1987, the NDB had transferred 61 stoas to the sole ownership of Papua New Guineans while 35 stoas were still under NDB supervision.

The stret pasin stoa program was discontinued in the early 1990s although according to Auditor General’s reports, the NDB was still supervising managers of nine trade stoas at the end of 2002. These were later transferred to the managers. With that, the NDB ceased management over all trade stoa companies across the country, and the managers were not only given full control of management and ownership of the trade stoa companies but also left with sufficient cash, training, experience, management skills, and maturity to manage the operation going forward.

The stret pasin stoa scheme is believed to have contributed immensely to improving the livelihoods of households that benefitted from it. Yet, very few (if any) of the stret pasin stoa companies are still in operation as trade stores. What happened to what was considered a very viable project that produced many national entrepreneurs? Here are some challenges that the scheme encountered and that need to be resolved first before starting to revive the stret pasin stoa scheme or starting a modified version of it.

First, the problems faced by NDB in expanding the stret pasin stoa program were not so much the inability to recruit local entrepreneurs. Instead, it became increasingly difficult to find appropriate sites to set up new stret pasin stoa enterprises. To date, every round of business and enterprise surveys rank difficulty buying or leasing land as one of the major obstacles to doing business in PNG. So, even when there has been some discussions about the possibility of reviving the stret pasin stoa program, the country will need to first free-up communally-owned land for business. The current policy focus on making land available for commercial purposes is well directed and must be fast-tracked to make commercial land available for businesses to buy or lease.

Second, the ownership of stret pasin stoa companies were transferred to the Papua New Guinean retail managers upon full repayment of the NDB loan. Although the managers were considered capable of operating the shops independently, there were no post-loan incentive programs to help recipients with additional training and loans to expand and grow their enterprises. Access to bank loan and lack of entrepeneurship skills development are two complementary obstacles that continue to stifle the growth and expansion of Papua New Guinean-owned businesses.

Recent newspaper reports suggest that financial institutions have began lending their shares of the government-backed loans in addition to their own funds. So, even when small business owners and managers decry the lack of access to finance, it does not appear that there is a shortage of public and private money in PNG that can be lent for business. What is needed is entrepreneurial skills of small business owners. People seeking bank loans should go for entrepreneurship training and development that include courses in business ethics, principles and knowhow of sustaining a business.

Thus, even without new commercial land to purchase or lease, adequate knowledge of how to use bank loans to make money in their own businesses is a must, as is putting that money in a bank to get the money revolving. To sustain a revolving credit scheme to fulfil the demand for small business loans, banks must invest in loan recovery efforts and their ability to demand repayments. The result will be a superior business support model without repayment problems.


This article was first published in the Post-Courier’s 8 July 2021 edition and on its website’s commentaries and features page.