The Papua New Guinea Government has allocated 4 million US dollars for the development of cooperative groups in the country.
The Commerce and Industry Minister Gabriel Kapris said this was a Government "commitment to rural development, poverty alleviation and people empowerment".
Mr Kapris said most of the money will be used for the development of co-operative societies.
The National Development Bank and the Department of Commerce and Industry are to sign an agreement to enable the bank to manage the fund on behalf of the co-operative societies unit.
Stakeholders from within Port Moresby and other provinces met last week to finalise a policy that would bring individual business people and farmers in rural areas together to form village-based co-operatives.