Escaping the ‘Bad Credit Culture’


Lack of easy access to finance for businesses operating in Liberia has been highlighted by small business owners as the most critical of the challenges facing small business development and growth in the country. If you were to take a walk down Water Street and on other streets with leading business centers and market places across the country, the story definitely will be the same – ‘no money to do business.’ As businesses take this debate to the doorsteps of financial institutions and the government, they ultimately get to hear another side of the story.

Financial institutions in Liberia, including the regulatory body, the Central Bank of Liberia (CBL), argue against this claim by business owners. These financial institutions have said that there is enough capacity to lend to businesses particularly to Liberian-owned micro, small and medium-sized enterprises (MSMEs). The fear, however, lingering within the corridors of the banks and other financial institutions is that ‘most of the businesses that borrow don’t pay.’

And if they do pay, most times, payments are not made on schedule. This means that it is not just the lack of easy financial access that is actually hampering business growth, but the credit culture of business owners. The government of Liberia, which finds itself in the middle of this crucial and challenging debate, tends to agree with the financial institutions.

The government has pledged its support to the CBL’s decision to begin naming and shaming delinquent borrowers. In the face of this debate, however, a female Liberian entrepreneur is turning the sector’s bad credit culture around. Madam Celestine Siapo is producer and dealer of locally made detergents and fragrance.

This woman is making headways in her business. She recently earned for herself winner of the 2014 Golden Image Award for Entrepreneurship hosted by Liberia’s Cultural Ambassador, Madam Julie Endee.

The Golden Image Award is an annual award that recognizes Liberians and others, who are movers and shakers in society in their respective sectors.

The award is a result of excellent business performance on the part of Madam Siapo, who turned a small loan granted her few years ago by the Liberian Bank for Development and Investment (LBDI) into a huge business.

With an initial US$5,000 loan from LBDI, Celestine has been able to turn her life around and now employs a number of youths. She travels to countries within and out of the West African sub-region to import fragrances and combine them through a kind of mixture to produce detergents and toiletries for washrooms, homes and for offices.

She started her small business a few years ago buying the detergents and fragrances locally. But with increased financing from LBDI, her business has seen growth as she increases her product supplies to homes, government and private offices in Monrovia.

 “Celestine has developed for herself a captive market. Many banks and ministries and agencies do business with her because of the excellence materials that she produces. And that is why it is important that Liberians who are making strides are supported by us at LBDI,” the LBDI CEO, Mr. John B. S. Davies, said in his reaction to Madam Celestine Siapo’s Golden Image Award.

 “We are extremely happy for her because she is a classic example of what it is to be an enterprising person and so are not hesitating in standing by her consistent with our mandate of capacitating Liberians. We can only hope that many other Liberians emulate her good example because if they do, Liberians will be fighting and winning the battle against poverty.”

 Not many Liberians know this woman by her name Celestine Siapo. She is commonly called Republic of Liberia (RL). RL, as she is widely called, is considered by many Liberians as a nationalist, who usually wears the red, white and blue national emblem (flag) dresses during major national and international events in the country.

 RL’s second most popular dress code is the yellow and green color of LBDI. What really makes RL far unique from other Liberian women is her hard working, transparent and motivational character, which LBDI president observed as is unmatchable among her peers. Mr. Davies added: “she deserves it.”

  As former comptroller of LBDI, Mr. Davies explained that RL has an impeccable entrepreneurial character distinguishing her from among other females of her peer. He told our business desk exclusively on Tuesday, July 22 that LBDI approved the initial US$5,000 for RL when she had no collateral.

 “RL’s first opportunity for financing from LBDI was several years ago when LBDI gave her a loan of US$5,000 to engage in micro small and medium enterprise (MSME) business.” The boss LBDI narrated that RL, along with about nine other women, was given the same amount as seed loan to start business.

 He explained, however, that of the 10 women, only Madam Siapo succeeded significantly where the others have failed.

 “Madam Siapo has been very punctual, consistent and very timely in servicing her obligation to LBDI to the extent that after two circles of financing by the Bank, we felt sufficiently convinced to increase her financing,” he said.

 According to the LBDI CEO, Management later approved the second circle of US$10,000 loan to Madam Siapo.

 “She paid the US$10,000 debt far ahead of due date and schedule.” The LBDI boss emphasized that the initial loan that was given to Madam Siapo was on the basis of personal guarantee, not on the basis of collateral, because, according to him, she had no collateral at the time.

RL, a very determined and enterprising business woman, applied for the fourth loan from LBDI in the tune of US$25,000. The Bank, without hesitation of the fairness of Madam Siapo, approved her request and disbursed the US$25,000 which she reportedly paid ahead of schedule.

 “She graduated from personal guarantee of third party guarantee to putting up her own collateral demonstrating a sign of maturity, progress, growth and staying through and being very confidence in what she is doing,” said the LBDI CEO.

 He disclosed that LBDI has given RL financing in the excess of US$50,000. RL has meanwhile thanked LBDI for the support and promised to ensure that she paid her debt on time and help improve her business.

Madam Siapo thanked the Golden Image Award team for the award and assured the public that the award will serve as encouragement for excellence.


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