Context: Papua New Guinea is a country with a youth bulge; 55.3 per cent of the population is 24 years old or less – 19.4 per cent is between the ages of 15 and 24 – and the population is still expanding. However, a growing population and relatively few work and decision-making opportunities have led to challenges such as how to address the need for more opportunities for trainings as well as greater political status among youth.
Another significant challenge in Papua New Guinea is that young people are often marginalized in society. Social structures frequently exclude youth from decision-making processes, as it is customary for older members of society to hold decision-making power. Therefore, youth cannot fully participate in the formal economy, and often cannot fully express their thoughts in public settings. The state-owned National Development Bank (NDB), the development finance institution of Papua New Guinea, noticed the challenging issues youth face and, through its subsidiary, the National Development Bank Investments (NDBI), launched a programme called the Young Enterprise Scheme (YES).
Implementation of programme/ initiative: YES is a programme funded by NDBI with the aim to help young people between the ages of 18 to 30 become self-employed by setting up and running their own businesses. The programme targets those who are unemployed or unable to get into tertiary institutions, as well as those who, despite having high school or university qualifications, cannot find work.
YES features small business trainings, loan funding and coaching over a 24-month period. It assists via mentoring and assessments with the opportunity to receive funding. Young people registered in YES can benefit from intensive management training, with one-on-one mentoring by Australian business experts. The programme commenced in November 2014 and is endorsed by the Department of Trade, Commerce and Industry, the National Youth Commission and the Small Business Development Corporation.
Main challenges: The NDB must consider how to deal with certain financial burdens when implementing the programme, because it is not able to bear the cost of all failure. Thus, improving success rates in start-ups is crucial to the programmes feasibility. YES gives loans to students through a selection process and requires a repayment plan to be developed. Students should be able to pay back their loans with money they earn in the future. As a result, students are motivated by the repayment plan to work harder on their start-ups in order to increase the success rate. This also benefits NDB, allowing it to avoid excessive financial losses.
Results achieved: Since 2014, YES has benefited many young people. From when training began, 150 candidates have taken part in activities. Of the original 150 applications, 46 participants have been successful, creating over 500 job opportunities for themselves and their employees; moreover, 3 participants have successfully secured a second tranche of funding.
Moving Forward: NDBI is planning to open another business incubation centre for young entrepreneurs. It tends to provide young people with more funding to let them start their business, and young entrepreneurs are supposed to market their products in the centre. The facility will have internet cafes and restaurants run by young entrepreneurs who are part of the YES Programme. What is more, the funding of NDB is growing. Every year there is funding of K100,000 per young person as part of a youth in business programme. A strong funding system will encourage more young people to participate in YES.
Replicability: The YES Programme focuses on young people and helps them start their own business with funding from the National Development Bank. Other countries can provide loans to youth and trainings to let them start small businesses so that they can learn to be employers and create more job opportunities for unemployed young people. The process of establishing YES is not so complicated and is largely dependent on political will and commitment from those involved.
References:
https://auspng.lowyinstitute.org/publications/entrepreneurship-png-trailblazing-young-enterprise-schemehttps://news.pngfacts.com/2015/10/ndbi-youth-in-business-program-to.htmlhttps://news.pngfacts.com/2015/10/ndbi-youth-in-business-program-to.htmlhttps://emtv.com.pg/ndbi-launches-young-enterprise-scheme/http://devpolicy.org/Events/2017/PNG%20Update%20Conference/Presentations/PS3_Oaktree_report.pdf
Acknowledgements:
This good practice was kindly prepared by Ms. Xibai Ren
Project Details
Date: December 6, 2018