Following Liberia’s long-running civil war, which ended in 2003, the country’s smaller businesses struggled on with almost no access to training or financing for support. They were largely shut out of formal import and export markets and battled with power cuts, pot-holed roads, and poor equipment.
Today, however, thanks to coordinated support from IFC, Liberia’s government, and a number of other development organizations, Liberia’s small and medium sized enterprises (SMEs) are winning the backing they need to grow.
A recent conference held in Liberia’s capital, Monrovia, and co-hosted by IFC, turned the spotlight on the needs of the country’s SMEs. The conference gathered dozens of small business owners, bankers, investors, and government decision-makers to discuss progress made by Liberia’s private sector, and to tackle ongoing challenges.
During the three-day conference, IFC announced it would help establish a collateral registry system in Liberia, which will allow SMEs to obtain loans using movable assets, such as equipment or vehicles, for collateral.
As part of its support for this innovation, IFC has worked with Liberia’s Central Bank and other stakeholders to establish secured transaction laws to support the collateral registry, greatly expanding access to finance in Liberia.
Also during the conference, Liberia’s President, Ellen Johnson Sirleaf, announced the establishment of a $1 million Liberia Innovation Fund for Entrepreneurship that will boost access to finance for smaller businesses, helping them obtain the funding they need to grow.
Liberia underscored its commitment to backing small business growth in 2011 by launching a National MSME Policy, targeting the thousands of business that provide the bulk of Liberia’s employment and income.
IFC advised on the National Policy, which aims to help businesses gain better access to markets, finance, and knowledge, and to improve the legal and regulatory framework for small business growth.
IFC and the World Bank have also advised Liberia on reforms that are making it easier for businesses to do business. Since 2008, Liberia has enacted about 60 investment climate reforms, jumping 21 places on the World Bank Group’s Doing Business Report, which measures the ease of doing business in 185 economies around the world.
Among other improvements, these reforms have drastically cut the time it takes to register a business in Liberia, from 99 to only two days. IFC’s support for smaller businesses also includes training programs, Business Edge and SME Toolkit, backing for a women’s network of entrepreneurs, and the SME Ventures Program, which is helping Liberia’s SMEs access the financing they need to grow.
Liberia receives additional support from IFC’s Conflict Affected States in Africa Initiative, which promotes private sector growth, job creation, and increased investment in countries recovering from conflict. CASA is backed by donor partners Ireland, the Netherlands, Norway, and Sweden.
Despite the recent gains made by Liberia’s smaller businesses, daunting challenges remain. Access to power and financing remain especially difficult. The country’s skilled workforce is small. For these reasons, IFC and the World Bank will continue to support private sector improvements in Liberia that lead to job creation, increased opportunity, and economic growth.