The Challenge
While Liberia has a large and growing base of small and medium enterprises that are a promising source of jobs, many of these businesses lack access to sufficient financing to make long-term investments and weather challenges like COVID-19. Most of the labor force in Liberia is employed in the informal economy such as smallholder farming, itinerant mining, and daily trading of commodities. In addition to these challenges, Liberia’s banks also lack consistent access to capital and most small business loans must be repaid within 18 months or less.
Our Solution & Impact
Financing from the U.S. International Development Finance Corporation (DFC) is helping the International Bank of Liberia increase its lending to small and medium-sized businesses. DFC’s new commitment of $20 million in financing extends an existing partnership through which the bank provided $20 million in loans to SME borrowers in key industries. With the new financing, the bank plans to offer loans with repayment timelines up to five years in sectors including construction, services, manufacturing, fishing, and transportation. The financing will also help boost import/export opportunities in the country. As part of the loan agreement, the International Bank of Liberia will also increase its lending to women and other underserved communities. This financing will enable the bank to continue to support the country’s small and medium enterprises that will play a pivotal role in the country’s economic recovery.