Rural finance development in Sierra Leone : a case study of the financial services associations
Thesis (MDF (Development Finance))--University of Stellenbosch, 2010.
Financial Services Associations (FSAs) have been established in Sierra Leone as a new form of shareholder-owned village bank since 2007, as part of an ongoing IFAD programme to assist the development of rural finance. This research report is a case study examining the viability of the FSA concept in the Sierra Leonean context, particularly with reference to previous research findings in other countries in Africa, and it includes a field survey within the communities and amongst the staff and board members of the FSAs. The findings of the study reveal a wide acceptance amongst the village communities of both the structure of the institutions and the products and services that they are capable of offering. There was no evidence of the abuse of their positions by the members of the boards with regard to their own loans and repayments, as had been reported in other studies. However, there is a pressing need for further staff training and sensitisation of the communities regarding their rights as shareholders. There is also a need for further injections of capital, and the study recommends the introduction of a wide range of additional products and services and the establishment of links with other financial institutions, such as community banks and commercial banks. It was found that there are considerable demands on IFAD’s management unit that is responsible for the FSAs. These demands are growing as the number of FSAs increases, and it is recommended that this unit be strengthened before continuing its expansion programme, to enable it to consolidate its strengths before its activities are dispersed too widely.