The Liberian Enterprise Development Finance Company (LEDFC) has received another boost in its efforts to support small and medium enterprises in the country through a loan of US$20 million.
The signing ceremony of the loan agreement was chaired by Groupe Ndoum, a Ghanian finance company operating in partnership with the Overseas Private Investment Corporation (OPIC).
OPIC is a self-sustaining U.S. government agency that helps American business invest in emerging markets.
The Liberian Enterprise Development Finance Company (LEDFC), following a performance assessment of its operations by the Overseas Private Investment Corporation (OPIC), has won a chance, for the second time in row to receive US$20 million for lending. The announcement was made by Dr. Papa Kwesi Ndoum, President and chief executive officer (CEO) of Groupe Ndoum, parent company of LEDFC.
According to Dr. Ndoum, the money will be used to lend to Liberian-owned small and medium enterprises (SMEs) and it is hoped that an additional US$16 million will come from other sources (not named) to increase the lending pot to US$36 million.
Dr. Ndoum added that the signing ceremony was to announce the availability of the second US$20 million so as to provide the space for qualified Liberian SMEs to apply for funding from the LEDFC.
LEDFC is the only Central Bank of Liberia (CBL) licensed development finance company in Liberia and is a member of Groupe Ndoum, a multinational company that has investments in Liberia.
“It is because of OPIC the first US$20 million came. This second US$20 million demonstrates, on the part of OPIC, not just a common support to the SMEs, but commitment to the revival of the Liberian economy,” Dr. Ndoum said.
OPIC was established in 1971 and, since then, it has and continues to provide businesses the needed tools to manage the risks associated with foreign direct investment, fosters economic development in emerging market countries, and advances the United Staes foreign policy and national security priorities.
“OPIC helps American businesses gain footholds in new markets, catalyzes new revenues and contributes to jobs and growth opportunities both at home and abroad,” Ndoum said. He added that OPIC also fulfills its mission by providing businesses with financing, political risk insurance, advocacy and by partnering with private equity investment fund managers.
For those seeking loans from the LEDFC, the general manager, Ambrose Houphouet, said an applicant must be a Liberian and running a business through which a few or some other Liberians are earning their daily bread and improving their lives through the acquisition of skills in order for them to provide help for others in need.
Houphouet said every applicant must be willing to pay back the full amount given him or her.
“The interest rate ranges between 11 percent to 15 percent per annum and it is the uncompromising expectation of LEDFC that applicants pay according to the interest rate agreed upon, so as to enable his company return the money to the companies that provide it. Other people, too, need the same money to expand and improve their businesses,” he said.
He said applicants, depending on each one’s business case, are encouraged to apply for at least US$10,000 or even up to US$1 million.
“LEDFC was founded in 2007 and as of that time, over 500 small and medium enterprises (SMEs) have benefited from the loan program and over 5000 jobs have also been created in the Liberian struggling economy,” Houphouet said. According to him, the initial money for the LEDFC to begin administering its loans was provided by the Robert L. Johnson (RLJ) Foundation.
“LEDFC has financial inclusion as a priority and, for this fact, three additional offices of LEDFC are now operating outside of Monrovia,” he noted.
He pointed out that in 2013 there were concerns that LEDFC could not have survived the tough business conditions in the Liberian economy but, having interest in ensuring that Liberian businesses keep up and running, his company got in touch with Groupe Ndoum for assistance and advice.
“Due to Groupe Ndoum’s in-depth experience and knowledge in financial matters in the sub-region, LEDFC accepted that it (Groupe Ndoum) take over the management of our company. This was in 2011,” he said.
Houphouet explained further that given Groupe Ndoum’s successful management of LEDFC, GN Bank went ahead to acquire the entity for an ownership transfer consideration of US$2,000. GN Bank also assumed the existing OPIC loan liability of US$20 million.
“GN quickly restructured LEDFC’s management and operations. It is significant to note that GN kept all employees of LEDFC as members of its employees. I mean, this was after it took over LEDFC,” he said.
He said the SMEs will soon be informed of when the disbursement of loans will begin at LEDFC for the second US$20 million.