By Alpha Abu
The Chief Executive Officer of Small and Medium Enterprise Development Agency SMEDA, Shiaka Sannoh has said that the first phase of the Munafa Fund that provides loans to small businesses on a low interest rate is progressing well despite a smearing campaign by some people that he said pose as members of Traders Union.
He made the claim on Friday 20 August 2021 whilst updating the press on the status of the scheme so far, an event that was attended also by representatives of the Financial Service Providers (FSPs) that disbursed the funds and some beneficiaries.
He said what they have been able to unearth so far was that the group claiming to represent the traders union had solicited monies up front from people with the promise of getting them the Munafa Fund. He stated that because SMEDA and the FSP’s have clearly defined laid down policies regarding accessing of the funds, the ill-intent persons have contrived all sorts of allegations against SMEDA. He emphasised that the Agency does not give out the loans and that such an undertaking was purely the responsibility of the FSPs who have to do background checks and determine whether applicants for the Munafa Fund satisfy the criteria. The SMEDA boss also emphasised that Munafa fund was not just for petty trading but also other businesses including the hospitality sector.
He also explained that 70% of the beneficiaries so far are women and indicated plans by SMEDA and a government Monitoring and Evaluation team to shortly mount a nationwide robust monitoring of the scheme. He also spoke about their reviewing of the three months window before start of repayment that saw it being limited to one month, after Finance Ministry officials raised concern of the likelihood of beneficiaries becoming slow in repaying because of the relatively long lull.
The initiative itself is a revolving fund provided by the government and Sannoh disclosed that by 12th September this year 50% of the fund’s repayments would have been collected and deposited into the kitty at the Central Bank, ahead of the anticipated roll-out of the next phase of the Munafa Fund. The CEO said on the whole the scheme is progressing well, with beneficiaries honouring their repayment obligations.
The Fund manager Komba Gbolie spoke about the remarkably encouraging 9% interest rate beneficiaries of the scheme would have to pay in stark contrast to what obtains in the commercial banks. He also noted that they have been notified about the differences in operational costs between FSPs especially those working in far flung localities and were looking at the possibility of a uniform rate to address the problem.
President Julius Maada Bio honoured his pre-election promise of introducing a loan scheme for small business. He formally launched the Munafa Fund which emanated from that promise, on the 12th March, 2021 in Magburaka town, Northern Sierra Leone.
Disbursement of the monies to the small business owners began on the 24th March 2021. 4.5 billion Leones have been issued out to 4,100 to those targeted, although it was reported that one of the FSPs Eco Bank, had given loans to more people beyond the official target, because of the high demand, with overall recipients so far numbering 4,639. The loan is to be repaid within a twelve month period. SMEDA is overseeing the process which is executed by ten FSPs across the country.
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