His Excellency President Dr Julius Maada Bio has unveiled the Le100 Billion Munafa Fund, the National Microcredit Scheme for 2021 to 2023 to support small and medium enterprises.
“Under the leadership of the Ministry of Finance and the Ministry of Trade and Industry, experts consulted stakeholders, businesses, commercial banks, and even Non-Governmental Organisations, nationwide. We are therefore pleased today to launch the National Micro-Finance Programme, the MUNAFA Fund.
“For the first three months of this 2021, Government is disbursing Le26.05 Billion to 11 financial service providers. These Financial Service Providers will then go on to lend money out to 4,100 beneficiaries targeted in every district,” he said.
President Bio also disclosed that the Service Providers had been hired through a competitive process and they would cover all districts and the Western Area, adding that the loans would be given out in groups of 5 or 10 and the loan size would initially be Le5 million and Le10 million.
He encouraged prospective beneficiaries to adhere to the rules, promising that if they did the amount would be increased to Le15 million and even Le20 or Le25 million as an incentive.
“This is not free money. This is money that we expect you to invest and payback. The difference is that, unlike the loans from Commercial Banks, the interest rate is set below 10%. This rate, we believe, will not pose a burden for people.
“Government will not be directly involved in managing this loan scheme. The Small and Medium Enterprises Development Agency (SMEDA) will play an oversight role in order to ensure that services are effectively delivered, and business development services are provided,” he said, adding that they had also taken into consideration lessons learned from similar initiatives, which was why they introduce an innovative governance structure with strict safeguards.
Minister of Trade and Industry, Dr Edward Hinga Sandi, said for the past months the government had been working on sustainable ways of helping business people in the country and now they had had a solution with the launch of the Munafa Fund.
Minister of Finance, Jacob Jusu Saffa, said that the project was here to stay and that it would increase its funding to beneficiaries every year, adding that beneficiaries should treat the funds with seriousness because they were expected to pay back.
The minister ended by saying that the fund would help to address the “bread and butter” issues in the country.
The Minister of Youth Affairs and Minister of Gender and Children Affairs said they were pleased for the development as it would help young people, especially women who were in the business sector.