On Wednesday, March 27, 2019, the Micro Small and Medium Enterprises (MSME) and Rural Finance Post Ebola Reconstruction Project (RFPERP) were extended from three to five years, a release from the Ministry of Finance and Development Planning said.
The two years extension grant agreement, according to the release, is intended to provide finance to MSMEs on a sustainable term, enhance capacities of local private sector financial institutions to lend profitably.
Out of the US$4.8 million, 4.0 million was used for direct credit to MSMEs, while US$800, 000 was used for operations and innovations capacity building for both the participating financial institutions, and the MSMEs benefiting the fund.
It may be recalled that in early 2017, the Liberian government received a grant of US$4.8 million from the World Bank for the MSMEs Post-Ebola Reconstruction Project.
The funds are channel through seven financial institutions, which include three commercial banks and four microfinance or non-banking institutions. These institutions are Liberia Bank for Development and Investment, GN Bank, Afriland First Bank, Diaconia MDI, BRAC, Foundation for Women’s, and Business Link all of which are required to use their internal lending frameworks and systems for the implementation of the program.
Deputy Finance Minister for Economic Management, Augustus J. Flomo, who spoke at the signing ceremony, said MSMEs remains the ‘main’ entry point to the labor market for youth, women and disadvantaged groups, especially those without formal education.
He said MSME can directly help to reduce poverty and integrate women and other marginalized groups into society.
Flomo believes it is the MSMEs sector that has great potential to grow the economy by serving as the engine for growth.
“The SMEs will also provide the opportunity for other people to have job and be able to expand the economic activities. So the government is committed toward this initiative and we are grateful to the World Bank for providing us the amount which got us started,’’ Minister Flomo said.
Flomo reaffirmed President George Weah’s administration commitment to the development objectives of the project.
He pointed out that government has worked with the participating banks and microfinance institutions to ensure that MSMEs are provided the loan on sustainable terms, while at the same time, ensuring that capacities of MSMEs are enhanced to properly manage the fund.
He assured partners that government will continue to work with partners in providing businesses access to capital as well as building the capacities of these businesses to properly manage their capital.
Commerce Minister Wilson Tarpeh, lauded World Bank and other development partners for their supports and staying with the country during its difficult times.
Tarpeh spoke of the efforts the government is making to develop a service center to help the business community solve some of the problems.
John B. S. Davies, President of the Liberia Bank for Development and Investment (LBDI), expressed gratitude to the government and the World Bank for extending the program.
“We also want to say thanked to the SMEs, because this program exist to help enable you and capacitate you to move your businesses forward,” Mr. Davies said.
According to him, the role play by MSMEs in the economy is a very important, “therefore, we as banks feel a sense of fulfillment in terms of our mission when we are able to work with the business community in fulfilling that role.”
Mr. Davies appealed to MSMEs that the extension giving by government is not for them to wait until the five year before thinking about payment, “because it is not the intent of the extension, but to ensure that businesspeople work with the commercial banks to pay back.”
The extension signing ceremony was attended by partners including Foundation for Women’s and Business Link, some officials from the banks and participating institutions as well as other senior management team members from the Ministry of Finance and Development Planning.