Restoring Depositors Confidence in Rural Community Finance Institutions across Liberia through a Share Mobilization and Outreach Strategy

    Restoring Depositors Confidence in Rural Community Finance Institutions across Liberia through a Share Mobilization and Outreach Strategy
    Shareholders in Fishtown, RiverGee County Photo credit: Knowledge Management and Communications Unit

    Thousands of women including youths and people with challenging abilities are expected to benefit from a new and innovative financial scheme intended to increase their shareholdings in rural community banks across the country. The new scheme is part of a financing arrangement with the International Fund for Agricultural Development implemented through the Rural Community Finance Project by the Ministry of Agriculture in collaboration with the Central Bank of Liberia. The two key objectives of the scheme is to increase women and youths shareholdings and decision making in rural community banks and to increase the rural community banks financial position to allow depositors to access loans and engage in different business ventures.

     

    The new financial inclusion scheme is spearheaded by the Technical Assistance and Supervision Unit (TASU), a unit established and annexed to the Central Bank of Liberia to provide technical support to rural community banks under the Rural Community Finance Project (RCFP).

     

    Launching the Share Mobilization and Outreach Strategy (SMOS) on behalf of TASU in three counties including Fishtown, RiverGee, Barclayville, Grand Kru and Greenville, Sinoe Counties recently, the Gender and Financial Inclusion Officer of TASU Ms. Olive B. Cisco said statistics gathered from the twelve existing Rural Community Banks in the country revealed that men presently hold about 75% of shares in all the bank. She said women and youths who are involved in various business ventures around the country are not utilizing the rural banking institutions, something which she says limits the voices of women and youth in the financial decision making in rural banking institutions.

     

    Unveiling the SMOS in the three counties, Ms. Cisco said in order to increase women and youth shareholding in the banks, IFAD in collaboration with the Ministry of Agriculture and the Central Bank of Liberia have introduced a matching grant for all women, youth and people with challenging abilities. She said, the sponsoring institutions will match all shares above two shares up to a total of 100 shares. “The offer of share matching will last for a period of five months. The male shareholders will also benefit from the matching scheme. For every two shares purchase by adult male, the sponsors will purchase one additional share making it three shares. Shares at the rural community banks are sold for $5.00 USD or its equivalence in Liberian dollars.

     

    Target groups for this new strategy are smallholder farmers, crafts persons and artisans, petty traders, female-headed households, food processors, local transporters, youths including the disadvantaged.

    She said as part of the strategy, linkages and networking training will be established through an exchange program where bank staffs will be seconded to other highly functional banks to benefit from hands-on training. “We will also provide business advisory services to women who intend to take loan for business purposes”.

     

    At the launched of the SMOS, the rural community bank tellers and officers received logistical support including generators and motorbikes. The motorbikes will be assigned to the Loan Officers who are responsible to visit the catchment area in search of new businesses to increase the bank’s portfolio. The generator will allow the banking hall to remain active throughout the banking hours.

     

    In separate responses from shareholders at the various meetings held in the three counties, the shareholders expressed disappointment that since the establishment of the rural community banks they have never been invited to any meeting and no Annual General Assembly (AGM) have been held in any of the Rural Community Banks. According to the co-chairman of the Board of Directors of the Greenville Rural Community Bank Ms. Victoria G. Blamo during the establishment of the bank in 2014, they were told that upon the purchase of shares in the bank they would be entitled to loans from the banks immediately. She said most women have been reluctant to save with the banks because of the lack of confidence in the banking sector so they prefer keeping their money through alternative means.

     

    Responding to the concerns of the shareholders and the depositors, the Internal Auditor at TASU Mr. Garfield Konneh said TASU was created to right the wrongs and make community banks viable and credible. He stressed the importance of functional Board of Directors at all Rural Community Banks. He said, “In the absence of a functional and active board it becomes extremely difficult to hold Annual General Meetings. He said the Board is intended to checkmate the bank management team in ensuring proper management of shareholders’ funds and declaring dividend on profits accumulated over the operational period. I encourage all of you to establish accounts with the banks and deposit your funds. As part of our supervision mission, we have planned a comprehensive operational and financial audit of all Rural Community Banks to regain the confidence of shareholders and make community banks viable as envisioned”. Mr. Konneh told the shareholders upon the declaration of dividends by the board, the profits will be distributed proportionally in the accounts of all shareholders.

    Meanwhile, the Rural Community Finance Project will deposit funds ranging from $1,200.00USD to $5,000.00USD in all the rural community banks depending on existing shares in each bank. This amount will be distributed proportionally among all shareholders who purchased shares at the onset of the establishment of the banks.

     

    Signed: Anthony K. Selmah

    Knowledge Management & Communications Officer

    MOA / IFAD-PIU / Program Management Unit (PMU)

    Tel: 0886108188 / 0770661173

    Email; aselmah@moa.gov.lr

    Alt: selmahanthonyk@gmail.com