Financing Small Businesses in Sierra Leone
Triple Jump’s DGGF Seed Capital and Business Development (SCBD) facility is financing ACTB Savings & Loans Limited, one of the first and largest upscaling microfinance banks in Sierra Leone. The funds will enable ACTB to expand SME lending operations and develop savings products targeted at women and young entrepreneurs.
Sierra Leone’s financial system is characterized by extremely low levels of credit penetration: credit to the private sector is merely 5 percent of GDP, marginally lower than Sub-Saharan Africa’s regional average of 30 percent. The SME sector, in particular, are virtually neglected by commercial banks. ACTB addresses this credit gap by financing small businesses.
By providing loans between USD 4K to 65K that are tenured up to 36 months, ACTB meets working and growth capital needs of small businesses. As both a micro and an SME lender, ACTB bridges the path to growth and formalization for informal businesses that are financed through micro loans.
Founded in 2008, ACTB started off offering micro loans to low-income people for productive purposes and began upscaling to SMEs in 2013. In 2017, ACTB transitioned into a microfinance bank to broaden the array of financial services offered to include payments, remittances and savings.
With an extensive presence across Sierra Leone, ACTB currently serves close to 16,000 borrowers, more than 70 percent of whom are women; and manages a loan portfolio of USD 3.5m, of which 30 percent is attributed to the SME segment. ACTB is now seeking to scale its SME lending operations.
The investment from SCBD will help ACTB expand outreach to SMEs, mobilise local deposits to sustain growth and reach sufficient scale to attract additional capital.