But who do you think is responsible for creating the non-performing crisis in Liberia?? Was it the lenders (banks)?? the borrowers??? Or the government (Central Bank of Liberia)??? If you say, the GOVERNMENT of Liberia!!, you’re a genius! Go to the head of the class!!….
Look, in the past, the lenders set their requirements (interest rate, collateral, income, etc) for lending their depositors money to you, the borrower. If you apply for a loan and met those requirements, the bank would, under normal circumstances, lend you the money. No prroblem..And if you defaulted on your loan, the banks would write it off against their profits…Writing off more bad loans meant less profits and the possibility of insolvency for you, the lender!!
In other words, the government had NO fish to fry, in a voluntary transaction, between you and your lender. The market place handled the bad loans, not the government Central Bank…BUT, but ( a big but) here’s the bad news!!: The non-performing loan crisis started when the book people (the know-it-all), at the Central Bank started pressuring, pushing and promoting their “financial inclusion” nonsense on private sector banks! Most of these book people, at the World Bank and Central Bank, had never, ever ran a lending business in their life before!!!
Um, um, do you know how the First International Bank Liberia Ltd (FIBLL), which was taken over by SIB Liberia Ltd (SIBL) became insolvent? It was the same “financial inclusion” nonsense that created the problem. Yes, in the name of “financial inclusion”, FIBLL was busy scheming and stealing their depositors money, and making risky loans to market women and yanna boys! In March 2010, over L$1 million and an unspecified amount in U.S. dollars went missing from the bank’s Clara Town Branch!!!,,Oh, wow!
By 2014, the Non-performing loans, at FIBLL had surged to 70 percent of its total loan portfolio!! Oh wow! And, and, to no one surprise, the bank (FIBLL) became insolvent!! But, but guess who came riding to their rescue with your hard earned tax dollars, to bail out FIBLL?? Yes, it was your friendly Central Bank of Liberia:)!
In 2024, the CBL wrote off US$8 milion (not a typo error) of FIBLL bad loans on their books! If you don’t believe what I just said, go Google “Central Bank of Liberia 2024 Audited Financial Statement”.. Look, you can’t make this stuff up! But, but do you think that will ever stop our book people from FORCING private sector banks to make risky loans in the name of “financial inclusion aka access to capital” to freeloaders?? Please…
Martin Scott
Atlanta, Georgia
