MICROCAPITAL BRIEF: Central Bank of Liberia Loans $483k to Three Counties in Western Liberia to Promote Financial Inclusion

The Central Bank of Liberia (CBL), the country’s central bank, reportedly has granted loans totaling LRD 38 million (USD 483,000) to 106 financial institutions located in the Liberian counties of Bomi, Grand Cape Mount and Gbarpolu in an effort to “empower” rural businesses and increase the financial inclusion of rural people [1]. Commercial banks would serve as intermediaries to disburse the CBL funding to rural inhabitants. The scheme allegedly generated some controversy on the grounds that it was risky to give out loans to Liberians because they frequently default on repayment. However, the Executive Director of CBL, Dr J Mill Jones, is said to have noted that this criticism runs contrary to CBL’s reported loan repayment rate of 100 percent for the last “two periods” of unspecified length [1].

Dr Jones also stated that CBL was in the process of establishing rural financial institutions to provide easy access to loans for rural people. Another service devised by the bank is a money transfer system that would allow individuals to send money to their families that live elsewhere.

The Central Bank of Liberia was established on October 18, 1999, with its primary aim to achieve and maintain price stability in the Liberian economy. Its microfinance work centers on regulation and supervision of microfinance institutions in Liberia as well as developing strategies for financial inclusion [2]. As of 2012, the reported total assets for CBL were LRD 45.3 million (USD 573,000).

By Anesa Kratovac, Research Associate

Additional Sources and Resources:

[1] All Africa Online News, September 4, 2013, “Liberia: CBL Loan Scheme Hits Western Liberia,” http://allafrica.com/stories/201309040996.html

[2] The Central Bank of Liberia Official Website, http://www.cbl.org.lr/content_main.php?sub=microfinancedocuments

MicroCapital Article, July 30, 2013, “MICROCAPITAL BRIEF: Ecobank, Lonestar Cell MTN Launch ‘Mobile Money School Fees Payment Service’ in Liberia,” https://www.microcapital.org/microcapital-brief-ecobank-lonestar-cell-mtn-launch-mobile-money-school-fees-payment-service-in-liberia/

MicroCapital Article, April 19, 2012, “MICROCAPITAL BRIEF: Liberian Senate President Disburses First Tranche of $18k Microloan Fund,” https://www.microcapital.org/microcapital-brief-liberian-senate-president-disburses-first-tranche-of-18k-microloan-fund/

MicroCapital Article, January 25, 2012, “MICROCAPITAL BRIEF: Central Bank of Liberia Launches $2.7m Loan Facility For Microfinance Institutions, Backed By United Nations Development Program,” https://www.microcapital.org/microcapital-brief-central-bank-of-liberia-launches-2-7m-loan-facility-for-microfinance-institutions-to-be-implemented-by-afriland-first-bank-backed-by-united-nations-development-program/

MicroCapital Article, January 27, 2009, “MICROCAPITAL STORY: Central Bank of Liberia (CBL) Grants Formal Banking License to Liberia’s First Commercial Microfinance Institution, Access Bank Liberia (ABL); ABL Starts Issuing Loans to the Public,” https://www.microcapital.org/microcapital-story-central-bank-of-liberia-cbl-grants-formal-banking-license-to-liberias-first-commercial-microfinance-institution-access-bank-liberia-abl-abl-starts-issuing-loans-to-the-publ/

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