RCBank; Redefining Small and Medium Enterprise Lending

43 year old Abu Bakarr Suma deals in cultural artifacts at the Famous Big Market in Central Freetown. Some six months ago, he was one among a group of 30 traders at the Big Market who benefitted from a whooping Le300m loan from the Rokel Commercial Bank.

Suma, who received Le10 million as part of his own share of the loan, has had an incredible business turnover since he invested the loan into more artifacts, targeting mainly tourists visiting the country. “Before that loan, my business was very small and I could hardly expand. After I received the loan and some business advice from Rokel Commercial Bank, my profit has increased threefold and life generally is now better for me and my family” remarked the father of three, who also expressed his desire to rent a bigger shop for his growing business.

On the back of a high pitched digitization and marketing programme, coupled with the introduction of revolutionary mobile based transactional software like the Rokel Simkorpor and E-Korpor, the bank had established a Small and Medium Enterprise (SME) loan department that already bear the hallmarks  of a  competitive life changer.  Generally, bank SME loans cater for the financial needs of SMEs, providing huge employment opportunities at relatively lower capital costs, and at the same time, also aid in industrialization of remote rural areas. Consistent with the Government of Sierra Leone’s Medium–Term National Development Plan (2019 -2023), the RCBank loan scheme has been tailored to target clients with little or no collateral, low interest rate, a flexible repayment plan and business development training.

The loan risk elements are significantly minimal.  Beneficiaries would have to coalesce or pass through reputable businesses with high capital inflows. These businesses or “middle men” will ensure that the bank is yanked off the burden of running after defaulting loanees.

So far, this has proven to be extremely effective. In the Southern Region for example, the first set of fifty beneficiaries (commercial motorbike riders) of a loan valued over Le 400,000,000 (Four Hundred Million Leones were able to repay a substantial amount of the  loans in just under three months, thanks to an efficient loan recovery system set up by the bank and its business partner, KAM Enterprise.  Rokel Commercial Bank’s Managing Director, Walton Ekundayoh Gilpin, insists that the SME loan scheme would address the impact of the COVID -19 pandemic on small scale businesses in Sierra Leone. Gilpin himself has been widely acclaimed for turning round the fortunes of a bank that nearly became insolvent, if not for recapitalization efforts by the Government of Sierra Leone in 2013. This development apparently increased government’s shareholding from 51% to 65%.

“With the Rokel Bank SME loan scheme, we are not only trying to contribute to the overall wellbeing of our country’s economy, we are essentially amplifying our drive to promote financial inclusion, which has been a core component of our policy objectives since the beginning of our transformation to become the biggest financial institution in Sierra Leone and beyond.” 

Gilpin further states;

“Today we are breaking new frontiers, entering into unchartered territories with a futuristic mindset. We believe our growth in assets, deposit base and profit margins is a pointer to how far we have exceeded expectations…..I truly believe the SME loan programme will be a life changer for today and many years to come….”  

Rokel Bank’s SME Manager, Haja Fanta Jalloh, also espoused on the importance of the SME programme averring;

“We want to drive financial inclusion by banking the unbanked population….create opportunities for youths to actualize their dreams by engaging them into productive activities, thereby reducing poverty, crime and make them financially independent, so they would pay taxes to government.”  

Small and Medium Enterprise (SME) Development has dominated the discourse about boosting Sierra Leone’s business environment and the economy. We have witnessed different models of small scale enterprise development since the years preceding the civil war to date.

The argument that loan schemes from micro finance institutions have been predatory and have not been able to lift up these small business owners out of poverty, can hold sway when we consider the manner in which some of these loans are being given out to small scale entrepreneurs. While there is no readily available data that the impact on the country’s economy has come from these interventions, there is a glimmer of hope that the “revolution” taking place in our traditional banking system would come to address this problem, and we can say thank you to Rokel Commercial Bank for blazing the trail.

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