Keita pots business center, a microcredit
sponsored project engaged in the manufacturing and sale of locally made
|Micro credit project
The Micro-credit for Sustainable Livelihood Project aims at expanding the
micro-credit scheme developed within LIR/95/004- Reintegration Programme and Poverty Alleviation. The expansion is directed towards rural communities receiving FAO' and WFP' assistance, as well as people who had received vocational and skills training through UNDP/ILO and UNICEF programmes. The objective is to create opportunities to self-employment, improve the income of about 10,000 poor, among whom women constitute the majority. The project also attempts building a
micro-finance intermediation capacity in order to sustain micro-credit operations in the country.
Evolution of the Project:
The pilot phase of the Project LIR/95/004 -
Reintegration Programme Management & Poverty Alleviation was officially introduced by UNDP/UNDESA in collaboration with Government of Liberia in February 1997, executed by United Nations Department of Economic and Social Affairs (UNDESA) on behalf of UNDP-Liberia. The disbursement of funds to clients actually started in August 1997.
The aim of the project during the pilot phase was to promote re-settlement and reintegration of vulnerable groups particularly returnees, former combatants and women.
The pilot phase ended on June 30, 1999. At the closure of phase one, the scheme had reached 4,881 clients through seven Implementing Partners in seven counties (i.e.Montserrado, Margibi, Bong, Bomi, Cape Mount, Lower Lofa and Nimba).
The total Revolving Loan Fund (RLF) in circulation during this period under review was US$ 281,275. All clients supported were engaged in petty trading.
A considerable degree of success was registered during phase one of the Project. This justified the continuation and upgrading of the scheme. Phase two- (LIR/99/006
"Micro-credit for Sustainable Livelihood") officially commenced on July 1, 1999 with the United Nations Office for Project Services (UNOPS) serving as Executing Agency and UNDP as the funding organization.
Under phase two of the Project, the scheme was directed towards urban/rural communities. The objective of phase two is to create opportunities of self-employment and improve the income of about 10,000 poor people particularly women.
Even though the project had a new management team, implementation continued through the seven partners mentioned above. Grand Bassa was added to the list of counties where
Micro-credit Project operates.
From July 1, 1999 to December 31, 2000, a total of 1,696 clients were recruited in Montserrado, Bong, Margibi, and Bassa Counties. During the same period in April 2000, US$ 100,000 was infused on the loan portfolio bringing the total RLF in circulation to US$ 381,275. This additional RLF was disbursed through four IPs namely AEL, SDP, SELF, & NAWOCOL.
It is important to note that the number of clients reached during the period under review is insignificant compared to the target population. There are several factors responsible for this. Firstly, our emphasis under phase two is on the productive sector. Funding projects in this sector requires thorough assessment especially as it regards viability and sustainability. In this sector, more time is required to recruit clients. Secondly, because of the experience from phase one relative to the hasty disbursement of RLF without proper assessment, these issues had to be taken into serious consideration.
A total of 11 projects were funded during the period in Bong and Montserrado counties. Less number of petty traders were recruited for the same period.
To date, we are operating in Montserrado, Bong, Margibi, and Nimba counties due to limited resources. Our repayment rate fluctuates between 74-89%. It is worth noting that we are operating in a post conflict situation under unfavorable circumstances.
As a whole, in the second phase of the project, some of the following were achieved:
1. As a tool for poverty alleviation, the scheme has provided credit facilities to over 6,000 direct and over 48,000 indirect beneficiaries.
2. The project has provided start-up capital (an initial amount of L$3,000-4000) to war affected persons and returnees.
3. The scheme has created greater awareness among the poor that it is possible to alleviate poverty by their own creativity using local resources and local knowledge.
4. One major impact of the scheme is that income generated from the micro credit enterprises established by female beneficiaries has enabled them to send their children to school, improve their living standards, provide primary health care to their families and ensure food security both at the household and community levels.
5. The formation of saving habits among the poor is one of the positive results of the scheme.
6. The project fostered cooperation and coordination among implementing partners, UN Agencies, and other stakeholders.
7. The project through training/workshops and donations succeeded in building the capacities of several local Implementing Partners.
8. Through the scheme, the beneficiaries reaped benefits including self- reliance and enhanced self-awareness.
9. The Project developed a Communication Advocacy Strategy by commissioning a Consultant to undertake the assignment.
10. The Project entered into a Memorandum of Understanding (MOU) with the
Gender, Rural Housing and Micro Projects to foster collaboration and synergy.
11. Plans are underway to work out modalities of collaboration with the Microcredit Unit of UNHCR, the Agricultural Project of FAO, Food for Lunch of WFP and the USAID.
- Lack of funds to operate Project Operational Centers (POC) in the leeward counties to enhance effective supervision and monitoring of the scheme.
- Lack of good Management Information Systems (MIS).
- Lack of adequate counseling and management support services.
- Lack of coordination mechanism among Micro-credit operators.
- Limited professional interaction with national counterparts
- Lack of adequate support for local Implementing Partners (IPs) for the effective implementation of the scheme.
- Lack of funds to provide safe for local IPs in the absence of banking facilitates.
The way forward:
- Additional resources should be provided to operate Project Operational Center (POC) in the leeward counties for the possible expansion of the project, the effective monitoring and supervision of the project.
- GOL should institutionalize micro finance in Liberia through its Medium Term Plan (MTP) with greater emphasis on capacity building and sustainability.
- Additional resources should be provided to expand opportunities for
Micro-credit Management training and skills especially the provision of functional education to upgrade the existing skills of the groups.
- GOL should devise innovative methods of financing Micro-credit operations.
- Create an enabling environment for the Micro-credit development. This involves the deliberate formulation and implementation of appropriate policies.