on small and medium enterprises credit in the asian region globalisation can be simply understood as the way in which the world has become a small ‘ village ’ or ‘ community ’ as a result of faster transport, communication and technological advancement which in turn resulted in the reduction in the cost of international trade, investment and in doing business ( time and space / distance ) between places and people. the asia - pacific region is part of this globalisation process, which has influenced the pace of growth and patterns in the region over the past decades. today we see vibrant and strong economies that are in the forefront of influencing the globalisation process itself through increased world trading, capital transfers and investments, skilled labour movements, and technological innovations and their use. there are many that argue, including those in our region, that globalisation has very limited impact on small and medium enterprises in the developing countries compared to those in the developed economies. there are also those who critically argue that globalisation has disadvantaged the small and medium enterprises in countries that do not have appropriate policy framework, regulations, entrepreneurial and managerial skills, finance and technology necessary for competition and survival. although this view has some merit, the reality about globalisation is that, among other positive changes, it eased capital transfers which provided for relatively easier access to funds by credit and supplementation institutions for on - lending to small and medium enterprises in the asia - pacific region. as international trade and investments increase, this trend is likely to continue and grow. innovative policies and practices of credit supplementation institutions in the asian region one of the major challenges to foster growth and sustainability, particularly in the developing economies, is the design and implementation of appropriate policies on developing small and medium enterprises. in economies where sound policies are in place, the problem may be due to the failure by the government to seriously ensure that those policies are implemented. as most small and medium enterprises in the developing economies do not have comparative advantage compared to large established companies, any attempts to capture niche markets, domestic as well as international, would be difficult unless appropriate government policies are in place and are effectively implemented to provide relief, particularly in the ‘ infant ’ stages of their growth cycle. observations from other economies, including japan, china and republic of korea showed that these countries have done very well because of their governments ’ policies and focus on encouraging small and medium enterprises to contribute towards economic growth. these are experiences worth noting and studying. regulation of small and medium enterprises small and medium enterprises in most countries do not have a

specific legal framework to regulate their activities as most governments share the view that too much regulations and unnecessary interference may impact negatively on normal commercial operations. however, small and medium enterprises are expected to abide by all other relevant laws and regulations, including taxation law. this is a subject of contention and therefore i would rather leave it for you to exchange views on it. financing small and medium enterprises through credit guarantee schemes amidst all the constraints facing small and medium enterprises, lack of finance or access to finance appears to be one of the main drawbacks for growth and competitiveness. this is a global problem, and we see that in the asia - pacific region as well. in some countries of our region, there have been initiatives to create avenues for small and medium enterprises to obtain credit without excessive scrutiny or discrimination by financiers or credit providers. this is done with the backing of governments by enabling the establishment of financial institutions that accommodate and target small and medium enterprises. in economies where the supply of credit is limited, linkage with banks and credit supplementation institutions is the solution. in the case of papua new guinea, there are relatively limited credit and supplementation institutions and financial institutions that are willing to provide credit to small and medium enterprises. the problem is even harder for the government - funded credit and supplementation institutions like the rural development bank to meet these credit needs because of the limited annual appropriation in the budget for this purpose. management skills, information technology and information resources apart from finance and other constraints lack of or inadequate managerial skills of entrepreneurs / owners of small and medium enterprises can be a negative factor that can lead to their lack of competitiveness and operational sustainability. financial institutions or credit and supplementation institutions may be willing to grant credit, but the risk associated with lack of knowledge and skills required to run a successful small and medium enterprises can be the influencing factor that prevents the extension of credit. further, lack of government support to institutions that are established to train and nurture aspiring businessmen and women are not being offered sufficient financial resources in the annual budget. in papua new guinea, the small business development corporation experiences the same problem. hopefully, the success of this training workshop will be an eye opener for the government to strengthen the capacity of the corporation to take on more future challenges to assist small and medium enterprises in the country. technology and information resources the globalisation process has made the world a ‘ smaller ’ place. we see the economies of the world becoming integrated more closely. catalysts in the process