By Azania Post Reporter
LIBERIAN government which is under President George Weah has got a boost from the African Development Bank to support small and medium enterprises in Monrovia.
The bank has announced to approve USD 20 million facility to boost lending to small and medium-sized enterprises in the west African nation
According to the AfDB, the loan was approved by the Board of Directors of the Bank yesterday , is a trade finance package for three Liberian commercial banks: Liberian Bank for Development and Investment (LBDI); International Bank of (Liberia) Limited (IBL) and Afriland First Bank Liberia Limited.
It consists of a composite funded and unfunded package under which the African Development Bank will provide funding to the three banks and a guaranty facility to allow international banks to extend confirmation lines to Liberian local banks.
Lack of trade finance has negatively impacted Liberia’s economic growth, particularly in the agriculture sector –which is heavily reliant on importation of farm implements such as fertilizer and machinery.
This has affected the manufacturing sector, which is greatly dependent on imported raw materials (intermediate goods) and capital goods (machineries and spare parts).
The US$20 million facility will provide access to short-term trade finance and expand the capacity of Liberian banks to extend liquidity support to SMEs to spur development in agriculture, services, manufacturing and construction sectors. It will also give confidence to international banks to enable them provide more lines for Liberian local banks.
It is aligned with Bank feed Africa and industrialize Africa development priorities, and its financial sector development strategy, which promotes increasing access finance for SMEs, and the widening and deepening of financial support.
Liberian SMEs in key sectors such as, agriculture, food transformation industry and reconstruction are expected to benefit from the financial support.