Voinjama, Lofa County – The Liberia Credit Union National Association (LCUNA) convened its 6th Annual General Meeting in Voinjama, Lofa County with a call by the Executive Governor of the Central Bank of Liberia to members of the Association to honor their debt obligations to the CBL and other lending institutions in the country.
Governor Milton A. Weeks said the Central Bank would continue to support the Loan Extension Availability Facility (LEAF) Program under a revised Framework but cautioned that only loan applicants who have successfully met their obligations will be considered.
Governor Weeks expressed concern that while a few borrowers have honored their obligations under the LEAF loan program provided by the CBL, most borrowers have not paid back their loans with the bank.
Mr. Weeks said the non-payment of the loans by delinquent borrowers is making it difficult for CBL to even consider requesting any additional funding from the Board of Governors of the bank.
“How do I go to my Board to say, please grant us some more money when the first money was not repaid,” Governor wondered.
The CBL Governor who delivered the keynote address Wednesday, May 31 in Voinjama, Lofa County, urged the Liberia Credit Union National Association to prevail upon its members to settle their loan obligations to open more lending opportunities for others.
Meanwhile, Governor Weeks has lauded the credit union sector in Liberia for its role in meeting the needs of an increasing number of unbanked and underserved segments of the Liberian population including the poor and low income households.
The Governor, however, spoke of the need for credit unions to merge their unions to make them more efficient and stronger.
The Governor recalled that prior to the war, LCUNA had 68 affiliate credit unions serving a total of 24,000 members.
Today, he said there are 260 primary credit unions and four regional credit unions with more than fifty thousand (50,000) members.
Most of the credit unions, he noted, are very small and operate in remote locations where banks or Microfinance Institutions (MFIs) are unable to serve.
“While they appear to be filling a gap,’ the Governor observed, ‘it is difficult to ascertain a clear picture of the operational and financial health of these financial institutions as less than one-third of the primary credit unions report to LCUNA.”
There is a need, the Governor said for all concerned to work together to correct this ‘deficiency.’
Governor Weeks also expressed concern that following more than four decades of existence, credits unions have not materialized into a robust federation as seen in other low-income countries.
With a few notable exceptions in Liberia, Mr. Weeks said, credit unions are not well managed.
He maintained that they do not operate sound management information systems (MIS); and are not properly governed and offer only basic services. Governor Weeks said efforts are being made by the Central Bank of Liberia to correct this trend.
He disclosed that among other measures the CBL has issued a Regulatory and Supervisory Framework for the licensing and operations of credit unions.
The Regulations, he said have already been introduced through sensitization workshops with credit unions to provide minimum regulatory requirements, prudential standards and operational guidelines required to operate credit unions.
The CBL, he said will begin the implementation of the credit union regulations starting with the enforcement of the licensing requirement and will provide support to LCUNA to implement the credit union Regulatory Framework to ensure compliance.
The CBL Governor also disclosed that through the Bank’s Financial Inclusion initiative outlined in its three-year Strategic Plan, the bank will strengthen credit unions through a strong legal and institutional framework.
He then challenged the leadership of LCUNA to strive for effective development based on good governance, effective management, financial discipline and a focus on quality in service delivery.
Successful change and development in the credit union movement, Governor Weeks added will depend on the quality of the leadership of credit union directors and managers.
“It will depend on the leadership and business expertise, credibility and skills of the people involved in credit unions,” he emphasized.
Governor Weeks reaffirmed the commitment of the CBL to work with LCUNA and the entire credit union movement in achieving its objectives.
He said it is the CBL’s responsibility and the bank will not shirk from that responsibility.
Also speaking at the occasion, the Chairman of the Board of Directors of LCUNA, Mr. Saye J. Biyie, lauded the Central Bank of Liberia for its continued support for the programs of the Union.
He assured Governor Weeks of LCUNA’s support as the Governor implements programs aimed at improving the financial services sector of the country.
The occasion was attended by representatives of credit unions throughout the country.