MICROCAPITAL STORY: Central Bank of Liberia Grants License to AccessBank Liberia Limited, a Commercial Microfinance Bank

Central Bank of Liberia (CBL) has granted provisional license to AccessBank Liberia Limited (ABL), a microfinance bank established in 2008, to operate as a commercial entity. AccessBank Liberia will open with an initial paid-in capital of USD 6 million, the minimum capital required by the CBL of banks operating in Liberia. AccessBank will focus on microfinance lending while also provide short and medium-term lending to small and medium enterprises.The shareholders of ABL include International Finance Corporation (IFC), a member of the World Bank Group, with 18%, European Investment Bank (EIB), long-term lending bank of the European Union, with 15% and African Development Bank (AfDB) with 15%. The primary sponsor of ABL is Access Microfinance Holding AG, a commercial microfinance holding company, that holds 52% of the share.

AccessHolding is managed by LFS Financial Systems GmbH (LFS ), a Berlin-based management and consultancy firm specialising in financial sector projects in developing and transitional countries. The group has invested in four microfinance banks as of 2007; AccessBanque Madagascar, Microfinance Bank of Azerbaijan, Socremo Banco de Microfinancas, and AccessBank Tanzania. Microcapital reported on AccessBank Tanzania here.

ABL had an initial shareholder capital of USD 4 million, which AccessHolding increased to USD 6 million to start up the licensing phase. The Bank is expected to attract about 81,000 voluntary depositors and mobilize resources of almost US$ 23 million with an average deposit amount of USD 300 to USD 1,000 per saver. In five years, ABL is projected to have expanded to 12 branches, with a workforce of about 400 people, an active client base of around 27,000, and total assets of USD 38 million.

According to a 2004 United Nations Capital Development Fund (UNCDF ) report on microfinance development in Liberia, the demand for credit from micro and small enterprises ranges between 62,000 and 82,000 customers with a combined loan volume ranging from USD 14 to 19 million. The supply reaches less than 8,200 customers with a combined loan portfolio of less than USD 250,000. Liberty Finance, a non-governmental organization providing microfinance, is the only microfinance institution in Liberia that is registered in Mix Market, a web-based, microfinance information platform.

Central Bank of Liberia was established in 1999. At the end of December 2007 the bank’s total assets amounted to USD 1.4 billion and total liabilities amounted to USD 1.2 billion, while owner’s equity totaled USD 222 million.

By Ipek Kuran, Research Assistant

Additional Resources:

CBL Press Release

Microcapital Story – April 28,2008

AfDB Press release

AccessHolding

UNCDF 2004 report

UNCDF

IFC – Summary of ABL

CBL annual report – 2007

Mix Market – Liberia

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