Government Provides Le50B for Micro-Credit to SMEs

By Theresa Kef Sesay

The Government of Sierra Leone, headed by the President, Julius Maada Bio, has provided Le 50 Billion for Micro-Credit to Small and Medium Enterprises in fulfilment of the President’s Manifesto Commitment.

In its quest to promote economic livelihoods and develop the private sector, the Ministry of Finance in the 2020 allocated the sum of Le 100 billion to SMEDA (Small and Medium Enterprises Development Agency) through the Ministry of Trade and Industry as Government’s support to SMEs (Small and Medium Enterprises).

The scheme, known as the MUNAFA FUND, is a fulfilment of His Excellency President Bio’s campaign promise – “Support to SMEs for growth, productivity and competitiveness.

The fund will be piloted for 4 years – 2020, 2021, 2022 and 2024.

For this year, the Ministry of Finance through the Ministry of Trade and Industry and SMEDA will be rolling out the fund with an initial amount of 22 billion.

This is targeting 6000 SMEs in all sectors across the country.

In addition to the Le 100 billion, the Ministry of Finance in the 2020 supplementary budget further promised to boost the initial Le 100 billion allocation with an additional Le 50 billion.

The implementation of the fund will be guided by an Operational Manual developed by a technical consultant on Micro Finance Development as the fund is a revolving fund.

The lending, according to the Manual, will be in two fold – SMEDA will lend to Financial Service Providers (FPS) while FPS will further lend to SMEs.

The interest rate, according to the manual, is settled at 9% which cannot be compared to any micro finance scheme in the country.

SMEs, as we all know, are the biggest employers and the main drivers of economic growth.

This scheme is expected to change the economic narrative of the country’s SMEs being challenged to access finance at low interest rate.

His Excellency President Julius Maada Bio is expected to launch the scheme on the 22nd of January 2021, in Magburaka town, the district headquarters of Tonkolili.