The President of the Liberia Bankers Association (LBA), Olalekan Balogun, has urgently appealed for increased initiatives to boost financial literacy in Liberia, with a specific focus on supporting small and medium-sized enterprises (SMEs).
At the introduction of the Financial Education (Fin-Ed) initiative and the Pan-African Resettlement Payment System (PAPPS), he highlighted that insufficient understanding of finance significantly hinders business access to loans within the nation.
At the event, Balogun highlighted that numerous small and medium-sized enterprises (SMEs) in Liberia are encountering substantial difficulties related to obtaining loans and handling financial resources.
He highlighted that the disparity in financial understanding hinders both companies and people from actively engaging in economic activities. "We have faced challenges related to financial literacy for an extended period. This is particularly important regarding financial inclusion and obtaining financing," he stated. "It’s crucial that we prioritize enhancing accessibility to finances as this is essential for the growth of our enterprises."
Balogun serves as both the CEO and Managing Director at Bloom Bank Liberia.
The LBA President's remarks were a response to growing complaints from the SME sector, which has long expressed frustration over the difficulty of securing loans from banks.
According to Balogun, while banks are eager to lend, the lack of proper understanding of financial products and borrowing mechanisms among potential borrowers is a major obstacle. "We hear complaints from the SME sector that banks are not lending, but that's not the case. Banks want to lend, but there is a significant gap in financial literacy, particularly when it comes to understanding how to borrow responsibly and repay loans," Balogun explained.
He urged the Central Bank of Liberia (CBL) and other involved parties to focus more on informing the public regarding financial management, particularly concerning borrowing, saving, and investment practices.
He pointed out that the importance of financial literacy extends beyond business concerns; it is equally crucial for individuals who might lack full comprehension of the various financial resources at their disposal and how to leverage these tools effectively.
It's a crucial problem impacting the wider economy," Balogun stated. "Enhancing financial literacy is vital to ensure that enterprises, especially small and medium-sized businesses, obtain the necessary funding to expand and succeed.
Balogun’s remarks coincide with Liberia’s exploration of advanced digital payment systems aimed at improving financial transactions. An example of this effort, the Pan-African Payment System (PAPS), was officially unveiled during the same occasion.
It is anticipated that the system will streamline cross-border transactions and decrease dependence on intermediary currencies, notably the U.S. dollar, which has historically presented difficulties for companies engaged in global commerce.
Balogun expressed enthusiasm for the platform, noting that it would provide a much-needed solution for businesses, particularly those in Liberia. "This system will make transactions faster, cheaper, and more efficient, enabling businesses to trade across Africa without the usual barriers," he said.
However, Balogun cautioned that while these technological advancements will benefit businesses, they must be complemented by improved financial literacy.
"The introduction of systems like PAPS is a great step forward, but if businesses do not understand how to use them effectively, the benefits will be limited," he stated.
He urged both the private and public sectors to work together to ensure that financial education is a key part of any economic reform efforts.
In closing, Balogun reiterated his commitment to supporting financial literacy initiatives, emphasizing that the LBA is ready to collaborate with the Central Bank and other partners to address these critical issues.
"The financial literacy gap is one of the most significant barriers to economic growth in Liberia," he said. "With the right education, businesses will be better equipped to navigate the financial landscape, access funding, and ultimately contribute to the country's development."
Provided by SyndiGate Media Inc. ( Syndigate.info ).
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