A grant of US$4.8 million has been approved by the World Bank for Micro Small Medium Enterprises (MSMEs).
The grant is expected to benefit over 500 Micro Small Medium Enterprises (MSMEs), currently doing business in the country
Making the disclosure at the official launch of the MSME and Rural Finance Post-Ebola Reconstruction Project (RFPREP), Deputy Minister Alvin E. Attah, on behalf of Finance Minister Boima Kamara, acknowledged the contribution of the World Bank through the provision of the grant, which would ease binding constraints to economic growth of the country.
Deputy Minister Attah stated also that MSMEs are less likely to have access to capital; instead, they often rely on informal capital sources, adding that 41 percent of them reported that access to finance was a major constraint to their growth.
He further explained that access to financial service can boost job creation, raise income, reduce vulnerabilities and increase human capital investment.
Deputy Minister Attah said the Liberian economy has been long driven by major concessions in rubber and iron ore, but government was shifting its focus to economic diversification, particularly through agriculture, agro-processing and manufacturing.
For her part, World Bank Liberia Country Manager Larisa Leshchenko said the Bank was pleased to participate in the launch of the Micro, Small & Medium Enterprises (MSMEs) project and to be a part of MSME Week.
He pointed out that MSMEs are drivers of economic activities, innovation and employment of the country economy, while at the same time leading regional transformation in ECOWAS by providing 90 percent of economic activity.
For her part, Ms. Leshchenko on behalf of the World Bank said the aim of the project, and the event in general, is important and relevant for Liberia, because small businesses are the lifeblood of the country economy, thus generating much needed jobs and income.
She pointed out that access to finance is consistently cited as a critical constraint to MSMEs and the MSME project promises to make important contributions in these areas.
“As we all know, the Liberian economy has faced tremendous challenges in recent years, ranging from the Ebola crisis, decline in commodity prices, to the drawdown of the UN Mission in Liberia. As a result, the rate of economic growth has fallen from high levels preceding the Ebola crisis to negative growth in 2016,” Ms. Leshchenko added.
Speaking further Ms. Leshchenko said “the good news is that there are signs that the worse is behind us and the medium-term outlook is positive. Economic activity is picking up and, according to the IMF, growth is expected to reach close to 7 percent over the medium term led by mining, with support from agriculture, services and manufacturing.”
She said it is important to ensure that growth is shared by everyone, and the Government’s efforts to support MSMEs, including this project, are important contributions to this critical objective.
The World Bank project seeks to boost private sector development by empowering MSMEs to lend on a sustainable term, while enhancing the capacity of local private sector financial institutions to lend profitably.
Additionally, the project will also strengthen the Liberia’s local private sector and banks and to ensure that banks are equipped to offer lending that matches the needs of MSMEs.
