MICRO-FINANCE POLICY

An integral strategy of our poverty reduction drive is the desire to reorganize the Micro Finance Sector with the aim of making it viable and responsive to the needs of the vast majority of Sierra Leoneans, in particular, to our people in the rural areas where financial services are grossly negligible. Micro Finance will therefore be the vehicle for providing financial services for the port in the short and medium terms. It should be recalled that 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.

To rise up to the new challenge of reaching every Sierra Leonean in need of financial services, the Government of Sierra Leone, in collaboration with its development partners, has formulated a National Micro Finance Policy, based on the principles of "best practices" elsewhere. This new policy will seek to promote the evolution and development of a viable Micro Finance sector that is accessible to all, and sustainable. It outlines the principles and guidelines that will ensure an attractive future for all stakeholders.

The policy anchors firmly on Government's overall development aspiration, which focuses on improving the quality of life of all Sierra Leoneans. The policy framework draws largely from the National Recovery Strategy in the short term and the Poverty Reduction Strategy Paper in the medium term, both of which emphasize the crucial role of Micro Finance in our endeavour to reduce poverty.

With the obvious limitations in the commercial banking sector in providing needed financial services for small and medium size enterprise development, our new Micro Finance Policy is poised to filling the existing gap between the formal and informal financial sectors for the provision of these services. In particular, it will harness the vast potentials for resource mobilization in the informal financial sector for development purposes and hence stimulate national recovery and sustainable economic growth.

In conformity with best practices elsewhere in the world, the Government will confine its role to creating the enabling environment for the Micro Finance sector to strive, while laying a strong foundation for macroeconomic stability and providing favorable conditions for supporting productive economic activities.

In order to cope with the unprecedented challenges that lie ahead, it is imperative that we ensure that viable Micro Finance institutions are formed, become operational and sustainable, in order that the impact of this on the lives of the people will be visible without delay, To this end, Government is keen on ensuring that, in the very near future when the sector would have grown to maturity, Micro Finance institutions are established closer to potential clients at all levels in order to increase accessibility.

Source : Foreword, National Micro Finance Policy

© DACO/SLIS July 2007