In the last three months of this year, the Central Bank sought help from Micro Finance Institutions (MFIs) to give interest forbearance to lenders of various borrowing institutions. According to the Chairman of Sierra Leone Micro Finance Institutions (SLAMFI) Archibald Shodeke, when the call was made by the Governor to them, they responded to him saying that this was what the sector was already doing and they agreed on a way forward. The Bank of Sierra Leone (BSL) told them that they will support the sector with non-interest loans to cover the cost of the forbearance during the three months.
“In terms of the forbearance and restrictions, some of the institutions made various decisions like negotiating with their customers on a payment plan and some even stopped collecting during that period” Shodeke said. The lenders he said were never harassed by MFIs and with normalcy returning payments have started coming in but at a relatively slow rate. The business people have started paying interest on their lending. “Generally our sector was seriously affected, even when things are normal it is difficult to collect those monies and now that they have a genuine excuse, it is a challenge. We have started doing regular transactions” he said.
Bank Governor Kelfala Kallon said that the interventions of the Central Bank as an autonomous institution is due to the fact that it is charged with supporting the economic policies of government, “we know that the economic crisis at this point is the greatest problem it is facing, so the bank is willing to go upfront to do the sort of things that we are doing to make sure that things work well in the country” he said.
Governor Kallon in May disclosed that they have also engaged the MFIs to ask them to give interest forbearance for up to June to market women who have been impacted by the economy and can’t service their loans. “Financial institutions also borrow these monies, so we at the BSL are willing to work with the MFIs to make sure that if the crisis continues we may even pay the interest these people would have been paying microfinance lenders so that the average woman is able to continue running their businesses so that they can feed their families” he promised. ZIJ/17/08/2020
By Zainab Iyamide Joaque