The company, Green Banana Paper, is based on the small island of Kosrae, which has a population of just over 6000.
Founder Matt Simpson said his goal was to create an environmentally-friendly company that also created jobs for the local community and farmers.
Mr Simpson said the company recycles banana trunks that farmers cut down after harvesting.
"So, I figured that I could help farmers earn some extra income and create something sustainable from a organic waste resource that is rapidly renewable."
