UNDP Microfinance Assessment Report: Sierra Leone

How can micro-lending programme succeed in the face of pressures toward capital accumulation?

The paper states that microfinance initiatives are both a timely and a highly practical way to help rebuild and enhance the earning capacity of the poor people of Sierra Leone. It is this reality that the government is now trying to combat with its National Action Plan for Poverty Alleviation, its programme of macro-economic reform supported by international development agencies and its policies of support for the private sector.

The paper proposes that poverty must be understood if a micro-lending programme is to succeed since it represents countervailing pressures toward capital accumulation on the one hand and dispersal of resources often for non-productive purposes on the other. It further takes a critical look at the financial sector, delving into the types of players and the two major sources of microcredit in Sierra Leone. Posits that overall, the subsector is very underdeveloped compared to those in many countries in the region. It says that:

  • The number of lenders is small;
  • The scale of lending is small;
  • The capacity of the lending institutions is weak;
  • The ability and - sometimes - willingness, to lend outside the western area is very weak;
  • The availability of training to strengthen such institutions is minimal.

About this Publication

By Walker, G.