Research on Microfinance Schemes in Sierra Leone

This research explored the role and potential of microfinance schemes, focusing on both formal and informal credit systems in Sierra Leone. It assessed existing microfinance schemes, identified best practices for delivering microcredit, evaluated infrastructure, and investigated institutional and legal arrangements needed to scale up services.

Key findings revealed a variety of formal microfinance service providers including banks, microfinance institutions, and government-donor supported schemes. The Osusu system — a significant informal rotating savings model — was identified as effective in sectors such as fishing and trade. Challenges included over-saturation of credit in urban areas, inadequate institutional capacity, and high default rates.

Recommendations included establishing credit bureaus, formalizing informal schemes like Osusu, expanding government-donor cooperation, and strengthening the regulatory framework for microfinance operations.