FLT gives local businessman confidence to grow his business
Success Stories September 27, 2023
Often deemed too risky to lend to, small businesses in Papua New Guinea face difficulty obtaining bank loans. Entrepreneur-sme.asia reports that only a quarter of small businesses have access to financial services in PNG. Some small business owners even don’t know that loan facilities exists and some even do not meet the requirement set by financial institutions to be eligible for loans.
Bernard Yaya, a 47-year-old small business owner in Goroka, Eastern Highlands is among those that did not meet the banks eligibility during his earlier days of starting a business. Nevertheless, Bernard never stopped dreaming about starting his own business. He had a dream of advancing further in education, but this reached a dead end when he dropped out in grade 10. In search for opportunities, he moved away from his village in Okapa district and settled in Kamaliki, just 10 minutes drive from the town. He ventured into crop production and sales with the aim of starting his own business. Whilst selling his produce at the town market, Bernard saw the need for transportation services within the vicinity of Goroka town. It was there that he got the idea to venture into a taxi business. With financial assistance from a relative, Bernard added up his earnings from the sale of fresh produce and purchased a sedan which he converted into a taxi and soon he was operating his own business.
“I was making K3000 (US$ 877) in two weeks and besides taking care of my household needs, I was misusing most of my earnings,” Bernard recalled.
Like every other small business owners who lack savings culture, Bernard continued to misuse his earnings thinking that he will still make K1500 (US$ 438) at the end of each week. He continued to operate his taxi business but began facing problems with the way he was spending his money. His taxi kept going into the workshop for repair costing him huge sums of money. He was losing business when the taxi was at the workshop. His finances were decreasing whilst the cost for running a taxi was accumulating. He needed another stream of finances to keep his business floating or needed to have tighter control of his finances. It was during this time that he heard from one of his clients about a training to budget and manage personal and family finances.
“I was transporting a client, not knowing the client was involved in providing the training on how to budget and manage finances,” he said.
“My client invited me to attend the training and I never regretted since,” he said.
To successfully run a business, Bernard needed a basic understanding of his finances. Through USAID’s PNG Lukautim Graun Program (LGP), Bernard completed a financial literacy course, learning the basics of how to save money, budget household finances, and access online digital finance. These skills are foundational for creating new enterprises and increasing household and personal financial security. The training provided participants with the opportunity to open saving accounts with MiBank, a nationwide micro-bank. Additionally, graduates became eligible to apply for access to MiBank’s lending options for growing their businesses and improving their livelihood activities.
Through the training, Bernard improved his understanding of the basic principles of savings and budgeting. It was also through the training that he realized he had missed many business opportunities in the past and gained the confidence to explore them. Today, Bernard is saving for his second and third taxis and also aims to complete building a new house to accommodate his growing family of seven.
“Thank you, USAID for giving me this opportunity to learn how to budget my finances. This training has taught me better ways to save and budget my money so I can achieve my goal of growing my business,” he said.
