Professional Documents
Culture Documents
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THE ROLE OF RURAL AND
COMMUNITY BANKS IN THE
PROVISION OF RURAL FINANCE
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PRESENTATION
By
MOHAMED S. FOFANA
Deputy Governor
Bank of Sierra Leone
prices (US$m)
inflation (ave.%)
Imports fob
(US$m) 185.5 264.3 284.5 317.5
-75.8 -142.0 -153.2 -165.4
Current A/c Bal.
(US$m)
* Projection
Reserves excl.gold
(US$m) 51.3 84.7 75.0 74.7
Total external 6
debts (US $ M) 118.8 1,467.6 1,630.4 1,640.0
2.0 OVERVIEW OF THE BANKING SECTOR
• Bank of Sierra Leone
• Sierra Leone Commercial Bank
• Standard Chartered Bank
• Rokel Commercial Bank
• Union Trust Bank
• Guarantee Trust Bank
• First International Bank
• National Development Bank
• National Cooperative Bank
• Post Office Savings Bank
• Sierra Leone Housing Corporation
• Community Banks
• NaCSA Micro Finance Window
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3.0 Rationale for the Establishment of Rural Banks
in Sierra Leone
Concern for the socio-economic transformation
and growth of the country’s rural financial sector
Taking banking facilities to the rural poor
Creating an institutional capacity for the mobilisation of savings
Delivering credit to small farmer
Provision of financial services to rural and medium-scale
operators to increase productivity, income and employment
Total Deposit 0.3 2.9 9.1 15.9 25.0 45.1 48.6 63.6 95.6
% Change in total 866.7 213.8 74.7 57.2 80.4 7.8 30.9 50.3
Deposit
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Table 3:
RATIO OF SAVERS TO BORROWERS IN
FOUR SELECTED RURAL BANKS (1985-1993)
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5.0 PROBLEMS AND CONSTRAINTS
Rural Banks
Under capitalisation
Inability to mobilise adequate financial resources
Inability to generate reasonable profit level
Slow rate of growth
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6.0 Rationale for the Establishment of
Community Banks in Sierra Leone
Mobilize idle rural resources
Deploy these resources for the extension of supervised credit to small
scale entrepreneurs
To replace rural banks registered by guarantee
Other related activities in the rural areas
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6.1 PERFORMANCE OF COMMUNITY
BANKS
As mentioned in the paper, Community Banks have only
operated for about a period of one year in Sierra Leone.
Measurement of their performance using the same indicators
as we did in the Rural Banks will be limited.
Total depositors over 12 Months period for 2 Banks– 1243
Deposits mobilised Le 2896.4m
Lending
No of borrowers - 92
Amount - Le 126.7m
Rate of Interest - 25-35 %
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Table 6.1(a):
DEPOSIT MOBILISATION
FEBRUARY-DECEMBER 2003
Product Yoni Community Marampa-Masimera
Bank Community Bank
No. of Deposits No. of Deposits
Accounts Le, 000 Accounts Le’000
Current 371 1,350,686 190 1,315,104
Account
Savings 471 118,457 211 112,176
Account
Total 842 1,469,143 401 1,427,280
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Table 6.1(b):
LOANS AND OVERDRAFT PORTFOLIOS FOR GROUPS AND
INDIVIDUALS AS AT DECEMBER 31ST 2003
Product Marampa- Yoni Marampa- Yoni
Masimera Community Masimera Community
Community Bank Community Bank
Bank Bank
Community Banks
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7.0 BENEFITS FROM THE
LESSONS LEARNT
Major problems and constraints faced by rural banks
now addressed:
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8.0 THE WAY FORWARD
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