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

of emerging risks in the traditional banking system that take into account indirect exposures to the non - banking system. - adapt and / or develop methodologies and models to assess the spillover effect of non - bank lenders in times of stress, as well as considering them in traditional stress test assessments. some context on oecd support to the use of cbm : a recent oecd document ( de crescenzio et al., 2015 ) emphasizes that mainly countries facing the “ original sin ” use cbm. chile is one of them. this issue is important because measures of the “ original sin ” come from panizza ’ s work, who will be part of the panel ( eichengreen et al., 2002 ; hausmann and panizza, 2003 ). based on the previous point, it is worth clarifying what kind of cbm are in place in chile. in addition, does the fact that in chile almost all - international bond issuing is in foreign currency represents a constraint / vulnerability for the local financial system? page 1 of 12 central bank of chile september 2019 - financial literacy and educational programs to support better decisions at the household level. 2. background in chile, the current approach to deal with potential vulnerabilities associated to volatile capital flows can be seen as orthodox, as we rely heavily on the importance of a flexible exchange rate regime and capital account openness, in conjunction with a consistent monetary and fiscal policy framework, and a sound banking regulation and supervision. however, it is important to remind to the public that we have come a long way. in fact, nearly 40 years ago, chile faced one of the world ’ s costlier financial crises precisely because the lack of several of these elements. in particular, fx exposures at a heavily leveraged and unsupervised banking sector contributed to the spread of the banking crisis after the fixed exchange rate regime collapsed in the early 1980s. as a result of this experience, banking regulation and supervision was substantially upgraded. in 1986, the general banking law introduced limitations on currency mismatch, constraints on related party lending, and restrictions for banks to receive goods instead of liquid resources ; all of them, elements that were common practice before the 1982 crisis. paradoxically, what could be considered harsher regulation did not hamper financial deepening. instead, it fostered solvency and credibility of the banking system and allowed its healthy development in the ensuing decades. at the core of this