Development of a Sustainable Pro-Poor Financial Sector in Sierra Leone (2004-2009)

This paper outlines the strategy of United Nations Capital Development Fund (UNCDF) and the Government of Sierra Leone to develop a sustainable, pro-poor financial sector.

The paper analyzes the current microfinance scenario in Sierra Leone and deliberates on:Supply and demand for microfinance;

• Opportunities and constraints for the development of microfinance sector:
• • Opportunities:High potential demand, government priority for microfinance, conductive legal and regulatory framework,
  • Constraints: Microfinance operators not commercially viable, lack of funding and lack of coordination between donors.
• Government policy and strategy on microfinance: Microfinance as one of the four key areas of intervention for restoration of the economy.

The paper also presents the strategy for achieving the goal of sustainable pro-poor financial sector. The strategy highlights:

• Using sustainable access to financial services to poor and low-income people as an effective tool for poverty reduction,
• Professionalizing potential microfinance market leaders.

Finally the paper enlists roles and responsibilities of project parties:

• The Bank of Sierra Leone to be government counterpart of the project,
• UNCDF/SUM to serve as executing agent for its own funds,
• Establishment of an investment committee in line with the Government's microfinance policy to coordinate activities in the microfinance sector.