MONROVIA– The Central Bank of Liberia (CBL) is set to bring together key players from government, the banking industry, the private sector and international institutions this week in an effort to address one of the country’s most persistent financial-sector challenges: non-performing loans (NPLs).
By Jaheim T. [email protected]
The three-day National Non-Performing Loan Resolution Conference, scheduled for September 9-11 at the EJS Ministerial Complex in Congo Town, is expected to serve as a platform for stakeholders to discuss the root causes of bad loans and develop practical measures to strengthen lending and improve access to finance.
According to the CBL, the event is being organized in collaboration with the Ministry of Finance and Development Planning, Ministry of Commerce and Industry, Liberia Bankers Association and the World Bank.
The conference will bring together senior government officials, banking executives, legal experts, development partners, private-sector actors and international specialists.
The gathering comes at a time when concerns are growing that the country’s rising stock of unpaid loans is affecting not only banks but the broader economy.
Financial experts say non-performing loans lock up resources that banks could otherwise use to support businesses through new credit and investment.
CBL Executive Governor Henry F. Saamoi said the issue extends beyond the banking sector and should be viewed as a national development priority. “NPLs are not only a banking-sector problem, but a national development concern,” Saamoi emphasized.
The governor explained that when loans remain unpaid for long periods, banks become more cautious about issuing new credit, limiting opportunities for businesses and individuals seeking financing.
“High levels of unpaid loans reduce the liquidity available for productive lending and make banks more cautious about extending credit to businesses and individuals,” Saamoi said.
He added that the consequences can ripple through the economy by discouraging investment and slowing job creation. “This can constrain private-sector investment, entrepreneurship, employment creation and economic growth,” Saamoi stressed.
Organizers say the conference is intended to create a national conversation around the causes and effects of bad debt while drawing lessons from countries that have successfully reduced non-performing loans.
Discussions will focus on improving lending practices, strengthening oversight, enhancing debt recovery systems and modernizing legal and insolvency procedures.
According to the CBL, participants will also examine issues related to borrower-lender relationships, credit infrastructure, digital finance and financial inclusion as part of a broader effort to improve the country’s financial environment.
“The conference provides a platform for stakeholders to examine the causes, consequences, and possible solutions to NPLs, while drawing lessons from successful approaches in other African markets,” the CBL said.
Officials say the ultimate goal is to build consensus around reforms that will make credit more accessible, improve confidence in the financial system and support private-sector growth.
“The ultimate objective is to build national consensus around reforms that can improve access to credit, strengthen financial stability and support private-sector-led growth and job creation,” the CBL noted.
The conference will feature local bankers, entrepreneurs, lawyers, policymakers and financial-sector professionals alongside regional and international experts with experience in credit risk management, loan recovery, investment banking and trade finance.
Organizers believe the combination of local and international perspectives will help participants identify practical approaches that can be adapted to Liberia’s unique circumstances.
“This will create an opportunity for participants to examine how other African countries have tackled NPLs,” the CBL said.
One of the most important expected outcomes of the conference is the development of a national roadmap to guide future reforms. The roadmap is expected to be accompanied by a conference communiqué and an implementation framework outlining specific actions and responsibilities.
“A key expected outcome of the conference is the development of a National NPL Resolution Policy Roadmap, supported by a conference communiqué and an implementation framework,” the CBL stated.
Officials say the process will focus on identifying legal, judicial, regulatory and institutional reforms that can improve loan recovery and strengthen the country’s credit ecosystem.
“The process is expected to identify concrete legal, judicial, regulatory, and institutional reforms necessary to improve loan recovery and strengthen Liberia’s credit ecosystem,” the bank said.
The conference will also explore opportunities for continued support from international partners, including the World Bank, International Monetary Fund, African Development Bank and International Finance Corporation.
Organizers view such partnerships as critical to sustaining reforms and ensuring the successful implementation of recommendations emerging from the conference.
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