MONROVIA – 29 May 2024: The Central Bank of Liberia (CBL), in collaboration with the Ministry of Commerce and Industry (MOCI), is pleased to announce the successful signing of Participating Agreements (PAs) with three (3) Financial Institutions regarding the implementation of the Line of Credit (LOC) under the Liberia Investment Finance and Trade (LIFT-P) Project. The project calls for more Liberian Micro Small and Medium Enterprises (MSMEs) to be empowered as a means of strengthening the economy.
The LOC falls under sub-component 2.2 of the LIFT Project, which aims to create access to credit to the tone of US$6 million for MSMEs to be channeled through competitively selected Participating Financial Institutions (PFIs). Financial institutions selected to participate in the LOC are Afriland First Bank Liberia Limited, Citi Trust Microfinance Company, and the Liberian Enterprise Development Finance Company, who would access US$1million, US800K, and US$700K, respectively, totaling US$2.5m of the total amount of US$6M. An additional US$1 million is earmarked to provide technical assistance to financial institutions participating in the scheme as well as other financial institutions and the CBL.
The Signing Ceremony, which was held on May 29 in the boardroom of the CBL, was attended by key stakeholders from the government, financial institutions, the business community, and representatives from the World Bank.
The LIFT Project, an ambitious undertaking, is designed to provide vital financial and other support to Liberian businesses, fostering trade, investment, and overall economic development. The Line of Credit is a cornerstone of the LIFT project, offering much-needed low cost and long-term loans to MSMEs with the view of promoting productive activities within the Liberian economy.
Speaking at the signing ceremony were the Executive Governor of the CBL, J. Aloysious Tarlue, co-chair of the National Project Steering Committee, Minister of Commerce and Industry, Amin Modad, Chair of the National Project Steering Committee, and Georgia Wallen, Country Manager of the World Bank.
The CBL Executive Governor and Commerce Minister thanked the World Bank for the support but emphasized the importance of the project targeting Liberian MSMEs.
Governor Tarlue called on the financial institutions implementing the project to ensure that only MSMEs are beneficiaries.
“This project is very key to my heart; because I’m concerned about women and single mothers who are small business owners,” EG Tarlue said. “We will make sure that it works well so that the World Bank can come again and support us.”
For his part, Minister Modad also stressed the importance of Liberian-owned businesses being the main beneficiaries, as Government seeks to strengthen the private sector as part of the ARREST development agenda.
“The primary objective of this funding is not to capacitate the commercial banks or the financial institutions,” he cautioned. “We believe the primary objective is to lift our people and empower them toward sustainable economic development.
“We hope that you (financial institutions) remain sensitive to the social economic condition of Liberians this time and the intent of this financing program. We don’t attempt to be discriminatory but please exhaust funding as much as possible toward the Liberian private sector in strategic areas in line with the national development goals.”
Speaking on behalf of the World Bank, which funds the LIFT Project, Georgia Wallen, the World Bank Country Manager said: “In the most recent World Bank Enterprise Survey, access to affordable and appropriate finance is cited as the top constraint for businesses in Liberia. This is why the Project aims to address this important constraint through the provision of a line of credit to financial institutions to scale up their lending to MSMEs. The facility will allow for the on-lending to MSMEs with longer loan maturity periods, allowing businesses the much-needed room to generate a return on their investment without the burden of having to start repayment within a contracted period.”
The launch marks a pivotal moment for Liberia’s economic landscape. By providing accessible and affordable financing options to empower local businesses to grow, innovate, and contribute to the nation’s prosperity.
The LOC is tailored to address the financial challenges faced by Liberian businesses, particularly SMEs, which are often hindered by limited access to credit. Through the project, the Government aims to bridge the financing gap, enabling businesses to expand their operations, increase employment, and drive economic development.
Providing an overview of the LOC, Mr. Jay Gbleh-bo Brown, Head of Development Finance of the CBL, indicated that the initiative is designed with several key features to ensure it meets the needs of local MSMEs and stimulates economic progress. These features include competitive interest rates, long-term and flexible repayment terms, including a grace period of up to one-year, dedicated support to businesses, access to large loans amounts, and focus on priority sectors for national development. Through these features, the LOC is well-positioned to support the development of Liberian businesses, fostering a more robust and resilient economy.
The LIFT Project is committed to creating a robust financial ecosystem that promotes sustainable economic growth. The commencement of implementation of the LOC, beginning with the first US$2.5 million through three financial institutions, is a testament to this commitment, paving the way for a more vibrant and resilient economy.