MFIs forum in Sierra Leone: resilience through partnerships

21 March, 2023

The managing directors of Microfinance Institutions (MFIs) in Sierra Leone recently gathered to discuss financial inclusion developments in the country. The meeting was initiated by Cordaid Investment Management (CIM) to promote dialogue among industry key players – the MFIs, CIM and the development institution UN Capital Development Fund (UNCDF).

"It was a learning event for everyone. As an impact investor in fragile markets, CIM initiated this meeting to learn more about the needs of our investees, but it turned out to be a great opportunity for microfinance industry leaders to discuss vital issues. It is an inspiring start to a pivotal dialogue. We are encouraged to see that the directors found common ground for collaboration and will continue the conversation on issues affecting them," says Archibald Shodeke, CIM's investment manager in Sierra Leone.

The new National Strategy for Financial Inclusion aims to increase access to and usage of financial services for all segments of the population, particularly women, youth, and people in rural areas. The strategy has three main pillars: expanding access to and usage of formal financial services, enhancing financial literacy and consumer protection and promoting innovation and digital financial services. The UNCDF Country Representative and CEOs of the MFIs - ASA MFI, ACTB, LAPO, GGEM, BRAC and WATU discussed the challenges MFIs face in expanding financial inclusion and shared best practices on how they can support the Financial Inclusion strategy. 

- ASA Microfinance (SL) Limited: Mr. Mozahidul Islam, Deputy MD 

Reducing poverty by improving the lives of the underprivileged with a key focus on female entrepreneurs.

- ACTB Savings and Loans Limited: Mr. David Kamara, CEO 

Supporting Private Sector Growth in Sierra Leone.

- BRAC Microfinance Sierra Leone (BMSLL): Ms. Shimimana Ntuyabaliwe, CEO

Inclusive financial services for people living in poverty, with a strong focus on women living in rural areas.

- GGEM Microfinance Services: Mr Michael Kamara, Executive Director 

Empowering grassroot women enterpreneurs.

LAPO Microfinance company (SL) Limited: Mr Gabriel Eshiague, MD

Social and economic empowerment of low-income households.

WATU: Mohamed Sheriff Bah, Head of Growth - Sierra Leone 

Tech based asset finance company that’s empowering youths with income generating tools.

One key challenge was the upcoming national switch for digital transactions that would enable MFIs to offer their clients more efficient digital financial services but can be costly for smaller MFIs to implement independently. To address this challenge, the directors discussed the possibility of uniting and pooling their resources to procure the necessary MIS or aggregation platform providing smaller MFIs to access the same level of technology.

Another topic of debate was data sharing with the microfinance association and the regulator. The directors recognized that data sharing could benefit both MFIs and the regulator, improving reporting efficiency and enhancing industry transparency. They agreed to collaborate and share best practices for implementing data sharing, standardized data collection and reporting.

The UNCDF Country Representative Wycliffe Ngwabe discussed how MFIs could support climate change adaptation and resilience for their clients, as climate change poses a significant threat to the livelihoods of many people in Sierra Leone. He shared insights on how MFIs can promote environmentally-friendly practices and support eco-friendly businesses. An opportunity is to promote the use of renewable energy, including financing innovative clean energy products such as electric bikes and solar home systems. CIM showcased an example of how an MFI can carry out a clean energy facility in partnership with another CIM investee - Easy Solar, a solar home system distributor in Sierra Leone. As a result of this collaboration fostered by CIM, MFIs can offer a new sustainable financial product and attract more clients, thereby contributing to the goals of financial inclusion and climate resilience. The MFI directors appreciated the initiative and felt encouraged to explore more such collaborations.

"As we discussed the challenges and opportunities in expanding financial inclusion in Sierra Leone, it became clear that this meeting was about the power of partnerships and working together. The outcome exceeded our expectations. I am confident that the MFIs in Sierra Leone can achieve great things as they continue to collaborate and build strong relationships with each other and other stakeholders," concluded Hann Verheijen, the MD of CIM, attending the meeting as part of his visit to Sierra Leone.

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