Sierra Leone’s Finance Minister, David O Carew, and the Ambassador of the German Republic to Sierra Leone, Rolf Saligmann, signed a Financing Contract for an additional three million euro to support the development of the pro-poor sector in Sierra Leone yesterday at the Finance Ministry.
The contribution is made by LFW Entwicklungsbank (Development Bank for Reconstruction of Germany) and it is expected to be used to support Microfinance Investment and Technical Assistance Facility in Sierra Leone (MITAF).
MITAF is a coordinated donor support programme to the Sierra Leone Microfinance sector that has been in existence since 2004, with an objective to increase sustainable access to financial services for poor and low-income earners in the country.
Speaking before the signing ceremony at the Finance Ministry, Deputy Bank Governor Mohamed Fofana said, “The introduction of the microfinance industry in the country is a well organized, commercially-oriented fashion which gives credence to the fact that the informal sector must be developed.”
“The Central Bank,” the Deputy Governor said, “wholeheartedly welcomes KWF as one of the donors poised to give support to the informal financial sector in the country.
The German Ambassador in his statement said his country has been supporting Sierra Leone in diverse ways, but was happy that they are supporting the Finance Ministry to get more efficient finance systems in place. The three million euros, the Ambassador said, is given to Sierra Leona as a grant by Germany but KFW is in charge of implementing the grant.
Finance Minister David Carew in his statement said the government of Sierra Leone has over the years been grappling with the impact of widespread poverty and that, to overcome such, the government has as its priorities: The maintenance of political stability, promoting good governance, and equity in service delivery, among others.
He said the provision of financial services to the “economically disenfranchised of the country in the form of microfinance is geared towards pro-poor sustainable growth for food security and job creation…”
Speaking further, the minister said the objectives of microfinance policy include, but are not limited to, “deepen financial services with focus on the poor in order to improve their livelihoods…” and to integrate the informal sector into the formal sector in order to promote accelerated economic growth.
Microfinance, the minister said, is still in its infancy and that “the total number of loans, both individual and group, as of December 2007, is 7,827 and 57,122 respectively. Sierra Leone still has the challenge of addressing the constraint that exclude the majority of her people “from participating in the formal financial sector…” he said.
The minister said the provision of the three million euros to build the institutional capacity of government counterpart institutions is a step in the right direction, and “government has always recognized and appreciated the assistance of the German Government through its Development Bank [KFW] in building the capacity of our provider institutions in Microfinance.” By John Baimba Sesay