A ten-man team from the International Fund for Agricultural Development (IFAD) financed Climate-Change Adaptation and Agribusiness Support Programme (CASP) in Nigeria, has concluded a study tour on Financial Services Associations (FSAs) in Sierra Leone.
The purpose of the study, which spanned from 23rd -28th March 2021, was to ensure participants from Nigeria gain a deeper knowledge of the FSA model and implementation in Sierra Leone, since its establishment in 2007 by the IFAD financed Rural Finance and Community Improvement Programme II (RFCIP II).
During the course of their stay in the country, the team held an initial meeting with staff of the RFCIP II, Apex Bank, Bank of Sierra Leone, and the Ministry of Agriculture and Forestry at the National Programme Coordination Unit (NPCU) office in Bo, where presentations were made on the project.
It preceded a field visit to selected FSAs in Bo, Kenema, Kailahun, Kono and Tonkolili districts respectively, where they met and discussed with management and staff, board members and beneficiaries of each FSA.
They discussed issues relating to the management structure, governance and loans system, successes, and challenges among others.
However, Mohamed Tejan-Kella, the RFCIP II Programme Coordinator, welcomed the team and thanked them for choosing to visit Sierra Leone at this time amidst the current pandemic.
He noted during his presentation that Sierra Leoneans will always be grateful to Nigeria for their invaluable support to Sierra Leone during the 11 years civil war.
He said the reasons for establishing Community Banks (CBs) and FSAs in Sierra Leone were to provide financial services in the rural communities where commercial banks are averse to operate due to high transaction cost.
"With the network of 17 CBs and 59 FSAs established across the country, the RFCIP II has impacted over 221,000 households including women and youths, transformed the Technical Assistance Agency into the Apex Bank to monitor and supervise the said institutions," he said.
He also noted that the RFCIP II has also constructed 93 staff quarters for all CBs and FSAs to ensure staff are resident in various communities to guarantee community ownership.
Buba B. Godobe, Deputy Director, Federal Ministry of Agriculture and Rural Development in Nigeria, said they were in Sierra Leone as a result of the successes recorded by the FSAs in Sierra Leone and to adopt the best practices in Nigeria.
"The FSAs in Sierra Leone are at an advanced stage compared to those established in Nigeria," he said, adding that they were very impressed to witness firsthand the impact FSAs have had on the lives of the rural people across the country.
Alimamy Conteh, Director of Business Development at the Apex bank, said FSAs are community-owned and mobilized savings in the form of equity through sale of shares to members in poor rural areas and extend the same to them as loans for grass-root businesses.
The FSAs started operation in Sierra Leone in April 2007, in Sengbe (Koinadugu district) and Nimikoro (Kono district). In 2008, 4 more FSAs were created and commenced operations in Peje West (Kailahun District); Mandu (Kailahun district); Nyawa (Kenema District) and Gaura (Kenema District).
It is important to note that a shareholder in FSAs can access loan 4 times his/her share and also FSAs do not have the mandate to accept deposit, but can accept safekeeping.
Meanwhile, all 59 FSAs established since 2007 currently have over 111,000 shareholders and can now take care of their staff salaries and running cost.
Capitalization, according to FSAs, still remains a major challenge faced by the network as the demand for loans (particularly agricultural loans) is higher than the available capital.
Madam Amie F Kallon, a shareholder and beneficiary said since she joined the Nyawa FSA in Kenema District, she has been empowered beyond her imagination.
"I use to be behind in making decision at home and in my community, but now with loans from this Nyawa FSA, I am no longer behind because if my husband can give me Le 50,000, I can contribute Le 20,000. Now I can support my husband to take care of our children, pay school fees and embark on other developmental projects like house construction among others," she said.