mohamed s fofana : benefits of microfinance in sierra leone speech by mr mohamed s fofana, deputy governor of the bank of sierra leone, at the official opening ceremony of the procredit bank ( sl ) limited, freetown, 1 february 2008. * * * madam chairperson ministers of government members of the diplomatic corps members of the board of directors, senior management and staff of the procredit bank ( sl ) limited heads of banks and other financial institutions colleagues from the fourth estate distinguished ladies & gentlemen : i am happy to be here this afternoon to address this distinguished audience on the official opening ceremony of the procredit bank ( sl ) limited. the bank of sierra leone issued a licence to procredit bank ( sl ) limited to conduct banking business in sierra leone on 1st august, 2007, and the bank opened its doors on 3 august 2007. its activities, since that time, have been largely focused on microfinance promotion ; taking deposits from and giving credits to small businesses. this is an important mile - stone in sierra leone ’ s poverty reduction drive, which is consistent with government ’ s desire to make the microfinance sub sector of the financial industry viable and responsive to the needs of the vast majority of sierra leoneans. madam chair, distinguished guests, the benefits of microfinance are numerous and well documented, especially as they relate to a country ’ s effort in reducing poverty. i cannot go through all such benefits this afternoon. i will however attempt to highlight a few. credit to small business will enhance the ability of poor households to increase incomes, build assets and reduce their vulnerability in times of economic stress. with better access to micro credit services on a continuing basis, the poor, particularly women, become more active partners and more importantly, pro - active partners, in the development process. madam chair, though micro credit has been used in various forms in the recent past to address the needs of the most vulnerable in post - conflict sierra leone, the providers of the micro credit have had an uncoordinated framework with each implementing its own scheme. this sometimes created an unnecessary duplication and waste in the use of scarce resources. thus, in october 2003, sierra leone adopted a national micro finance policy which provides the fundamental framework and direction for stakeholders operating in the microfinance industry. recognizing the importance of micro finance in reducing poverty, and in anticipation of the growing demand for micro credit products, procredit bank ( sl ) limited decided to increase

paradox that challenges scholars and policy makers alike. several reasons have been advanced for this state of affairs. they include inappropriate macroeconomic policies, weak institutions, weak executive capacity, weak legal institutions, and severe exogenous and endogenous factors. time will not permit me to dwell on the relative contribution of each of these factors to the overall poor economic performance. suffice it to say that efforts to address the resultant problems underpin the current far - reaching reforms undertaken by governments in the sub - region. these include financial sector reforms, public sector reforms and the privatization of public enterprises. following several years of persistent reforms, some modest improvement has been registered in recent times. real gdp growth rates of most countries in the sub - region averaged 4. 3 percent in 2003, compared with 3. 7 and 1. 9 percent in 2001 and 2002 respectively. the average fiscal deficit to gdp ratio improved significantly, from 4. 2 percent in 2002 to 0. 7 percent in 2003, although most of the economies remained fiscally fragile. inflation rate accelerated marginally to 6. 0 percent from 5. 5 percent in 2002. overall, the external sector of the sub - region improved somewhat as the current account position recovered from a deficit to gdp ratio of 4. 3 percent in 2002 to 1. 7 percent in 2003, driven by the significant turnaround in the export growth of 4. 5 percent in contrast to the decline of 3. 0 percent in the preceding year. managing a post - conflict economy here in sierra leone, the government has stayed the course in its reform programme with an accent on reconstruction and rehabilitation. helped by the quick repossession of the agricultural and mining belts by government, real gdp grew steadily from 5. 4 to 6. 6 and to 7. 0 percent in 2001, 2002 and 2003 respectively. the marked recovery in the export of cocoa and diamonds contributed significantly to gdp growth. for instance, the volume of cocoa exports more than doubled from 1, 178 metric tons in 2002 to 2, 752 metric tons in 2003, while diamond exports as valued by the government gold and diamond office ( ggdo ) increased by 155 thousand carats or by over 44 per cent in 2003. not surprisingly, the problems associated with fiscal management in a post - conflict environment have exerted enormous pressures on government finances. in an effort to strengthen its revenue base, government has established the national revenue authority to unify the income tax and customs and excise departments into a single unit. as