By Samuel Ibrahim Koroma
A team of ten (10) officials from the International Fund for Agricultural Development (IFAD) financed Climate-Change Adaptation and Agribusiness Support Programme (CASP) in Nigeria has concluded a study tour of Financial Services Associations (FSAs) in Sierra Leone. The main objective of the study tour which took place from 23rd -28th March was to ensure participants from Nigeria gain a deeper understanding of the FSA model implemented in Sierra Leone since 2007 by the IFAD financed Rural Finance and Community Improvement Programme II (RFCIP II) supervised by the Ministry of Agriculture and Forestry.
The team held an initial meeting with the Staff of the Rural Finance and Community Improvement Programme 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 various presentations were made on the project, Apex Bank, and the FSA model.
It preceded a field visits to selected FSAs in Bo, Kenema, Kailahun, Kono and Tonkolili districts designed to meet and discuss with management staff, board members and beneficiaries of each FSA. Discussions were held around management structure, governance and loans system, successes, and challenges among others of the respective FSAs visited.
The RFCIP II Programme Coordinator, Mohamed Tejan-Kella welcomed the team and thanked them for choosing to visit Sierra Leone amidst the current pandemic. He said Sierra Leoneans will always be grateful to Nigeria for their invaluable support to Sierra Leone during the 11 years civil war.
During his presentation to the team from Nigeria, Mr. Kella stated that the Community Banks (CBs) and FSAs were primarily established in Sierra Leone to provide financial services in the rural communities where Commercial Banks are averse to operate due to high transaction cost, and to serve as a catalyst to accelerate economic, agricultural, social, and rural transformation.
He disclosed that “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 also noted 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.
Barrister Buba B. Godobe, Deputy Director, Federal Ministry of Agriculture and Rural Development in Nigeria said their visit to Sierra Leone emanated from the successes scored by the FSAs in Sierra Leone, and to adopt the best practices in Nigeria. “The FSAs in Sierra Leone Barrister Godobe confesses, are at an advanced stage compared to those established in Nigeria,”. He noted they were very impressed to witness firsthand the impact FSAs have had on the lives of the rural poor across the country.
Ask how different are FSAs from normal Commercial Banks and Community Banks, Mr. Alimamy Conteh Director of Business Development at the Apex bank said FSAs are community-owned and managed financial institutions that mobilize 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.
It could be recalled that 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); Niawa (Kenema District) and Gaura (Kenema District).
It is important to note that a shareholder in an FSAs can access loan 4 times his/her share, and also FSAs do not have the mandate to accept deposit, but can accept safekeeping. All 59 FSAs established since 2007 currently have over 111,000 shareholders and can now take care of their staff salaries and running cost.
However, capitalisation still remains a major challenge faced by the network, as the demand for loans (particularly agricultural loans) is higher than the available capital.
Sharing her story with the team, Madam Amie F Kallon, a shareholder and beneficiary said since she joined the Niawa 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, she reveals, but now with loans from their Niawa FSA she added “I am no longer behind because if my husband can give me Le 50,000 I can contribute Le 20,000…”
She furthered that at present, she is capable to support her husband to take care of their children, pay school fees and embark on other developmental projects like house construction among others things.