OPIC lends $20m to Liberian bank to support lending to businesses in key sectors
The project focuses on various sectors such as construction, services and manufacturing.The Overseas Private Investment Corporation, the US Government’s development finance institution, has signed a commitment letter to lend $20 million (€18 million) to International Bank Liberia Limited (IBLL) to support lending to businesses in Liberia.
The project, which focuses on the construction, services, manufacturing, agribusiness, hospitality, and transportation sectors, seeks to foster jobs and opportunities and to increase long term lending to the Liberian private sector.
The Liberian banking sector is faced with a number of critical challenges. Profitability remains a "major challenge" to the banking sector, according to a recent financial and economic bulletin from the Central Bank of Liberia (CBL).
It pointed at the poor quality of banks' assets, a weak credit administration, as well as banks' relatively high operating expenses.
"Despite these challenges, the banking system continues to be well-capitalised and liquid, reflecting the continuous public confidence in the system," the bulletin noted.
Banks are still recovering from the Ebola crisis. In 2015, the CBL offered a relief package, waiving default charges and extended repayment periods on loans, and also paid off outstanding loans taken by schools that were forced to close.
Enterprises in Liberia also face a number of constraints to profitability and growth -
including a lack of access to finance - with the Ebola crisis exacerbating those challenges.