President Julius Maada Bio has launched the MUNAFA Fund that was established to address the challenge of small and medium enterprises limited access to financial services.
Between now and 2023, the Fund which has a budget of Le100 billion to support the loan scheme, will be managed by Financial Service Providers (FSPs) who will be disbursing Le26 billion for the pilot phase.
“Previously you used to get Le500,000 as microcredit that is pauper-microcredit it will not benefit you, it is meant for you to run away and leave your house, we do not want anyone to change address we want you to build a house and stay and we will come back” he assured the traders.
This he emphasised is their investment scheme in human beings and that they know that everybody has a plan but they are plans that do not have money to roll them out, as a result government has come to support and to also honour their promise.
The Fund was launched last Friday in Magburaka and the President presented symbolic cheques totalling Le26 billion to ten Financial Service Providers (FSPs).
Chief Executive Officer of the Small and Medium Enterprises Development Agency (SMEDA) Sharka Samuel Sannoh said that traders have suffered for far too long to access finance and that the only thing new in the scheme is how the New Direction has tailored it.
Speaking on the new approach, he said that during the drafting stage of the Fund it was inclusively done as people across the country participated and they own it. “We are working with people on how to manage business but the President told us that it will not be sufficient if not backed with finance” he explained.
A Strategy he said was developed and it went through several stages by taking it to all the regions, engaging all stakeholders including the development partners and was finally taken to the Economic Management Committee at State House and the Minister of Finance put aside funds in the 2020 Budget to support microfinance.
He cautioned business people who would want to access the loan that they should be legally registered with either the Corporate Affairs Commission, Office of the Administrator and Registrar General or the District Councils. Those certificates he said will qualify them to register with SMEDA.
“We have you all in our database and that will be submitted to the FSPs who will receive the funds from government, that doesn’t mean if you do not have in this first rounds you will lose hope, it is ongoing as it is a revolving fund. I want to appreciate the Ministers of Finance and Trade.”
Finance Minister Jacob Jusu Saffa, in his statement re-echoed the difference of the MUNAFA Fund in several respects as a national program set up with taxpayers money with no support from any donor money.
“We are not going to find the money it is already available; it is a permanent program in the Budget. We can increase it as much as necessary but that is dependent upon your commitment towards repaying the loan. If you do not pay, we will hold it back but if you pay, we will increase it,” he said.
Minister Saffa furthered that he can boast of adding Le10 billion to the Fund monthly but that is dependent on how well the pilot phase progresses.
Trade Minister Edward Hinga Sandy, said that microcredit facilities have failed before, but he is confident that the MUNAFA Fund will not as it has 9% interest rate and a grace period of about three months before repayment.