The United States Government and Afriland First Bank Liberia Limited have signed a new partnership agreement, known as the Development Credit Authority (DCA) to increase agricultural lending in Liberia.
The symbolic signing ceremony took place on Tuesday at a resort in Monrovia.
USAID Liberia’s Mission Director, Dr. Anthony S. Chan, signed on behalf of the U.S. Government, while Hamadou Bayo, managing director of Afriland First Bank Liberia Limited, signed for his institution.
In brief remarks Dr. Chan emphasized USAID’s commitment to work with Liberians, particularly in micro, small, and medium enterprises (MSMEs) to grow the country’s economy.
He expressed the hope that the newest partnership with Afriland First Bank would complement other USAID-sponsored programs pursuing growth in the private sector, and create employment opportunities, especially through MSMEs.
Dr. Chan said USAID has been able to get the utilization of its credit facility up from ten percent in 2009 to as high as 56 percent at present; adding that the program has supported 137 enterprises to win 342 contracts worth US$31 million.
“Today, we want to expand our efforts to continue to unlock the productivity of the private sector by providing credit through mechanisms such as the DCA with Afriland First Bank,” he said.
This partnership, he added, “will go a long way towards helping to create jobs and grow the Liberian economy.”
He said the US Government and Afriland First Bank would share the risks in piloting new financing options to MSMEs, especially those in agriculture and construction sectors.
He said agriculture and construction are regarded as particularly risky businesses, but there is a special value to be added by sharing some of the risks and creating employment opportunities in these sectors.
Afriland First Bank brings to three the number of DCA partner banks in Liberia. Others are International Bank Liberia Limited and Ecobank Liberia Limited.
For his part, Afriland First Bank Managing Director, Hamadou Bayo, said one of the most important productive parts of African economies is agriculture and financing agriculture is one of his bank’s top priorities.
“As an African Bank, we are convinced that one of the vehicles for development is finance. We are grateful to USAID and IBEX for supporting us through DCA and believe strongly that we have a lot more to do together,” he said.
USAID implements the DCA program in Liberia through its Investing for Business Expansion Program (IBEX).
The program offers financial services to local businesses and commercial bank staff, including technical assistance and capacity building support, such as training, coaching, mentoring, advice and loan facilitation for business growth and expansion.
DCA seeks to improve the commercial viability of underserved markets so that lending and investment continues long after the USAID’s DCA program.
Earlier, IBEX Chief of Party, Mrs. Watchen Harris Bruce, expressed thanks and gratitude to USAID for its continued support to her program.
Mrs. Bruce said the program focuses on making the deals work and explained that DCA is all about loan guarantees through the US Government to ensure that financial institutions’ risks are mitigated.”
She said IBEX remains supportive of the Liberian government’s development agenda.
“IBEX works with financial institutions to make the deal feasible as well as with small and medium enterprises to make them bankable so they can access finance to expand their businesses,” Mrs. Bruce said.
Deputy Commerce Minister for Industry, Ellen Pratt, heads of other USAID-sponsored programs in Liberia, and representatives from DCA partner banks attended the event and made separate remarks.