An audit record on the Ministry of Finance and Development Planning (MFDP) has revealed that 24 borrowers who received cash loans amounting to US$965,400 have not made any repayments in line with the association. The document additionally says a further 12 (12) businesses received a quantity of US$545,700. However, none may be located anywhere in Liberia, and the phone contacts of the folks who owned those agencies have been completely switched off. Through the Private Sector Development Initiatives (PSDI), the mortgage became supposed to financially reinforce Liberian-owned organizations, which had been predicted to repay, and the payments might revolve or be dispensed to different Liberian companies.
PSDI is an undertaking mounted in 2014 on the MFDP to provide loans to Liberian-owned small and medium-sized organizations (SMEs). The method could have created jobs and elevated the participation of Liberian-owned organizations in the financial system. According to the auditors, from 2014 to 2016, the challenge dispensed US$2,274,400 to 40-six (46) borrowers. The report noted that Dr. James F. Kollie, former Deputy Minister for Fiscal Affairs (MFDP), signed all the loan approvals even while serving the function.
“Documents reviewed confirmed that out of a preliminary quantity of US$1,991,900 that was distributed to thirty-six (36) clients, the handiest US$282,500 has been recovered. The recovered amount turned into re-disbursed to an additional ten (10) customers, thereby raising the portfolio to US$2,274,400—this approach that the initial disbursement of US$1,991,900 continues to be perfect,” the report states.
Out of 46 (46) borrowers, the most effective Garson Incorporated, positioned on 11th Street, Sinkor, believed to be owned by Dr. James Kollie, paid its duty of US$150,000 plus US$10,500 interest, amounting to a total compensation of US$a hundred and 60,500. Garson Incorporated’s account statement exhibits that the organization has, most effectively, an outstanding US$11.00 obligation.
The Internal Audit Unit (IAU) of the Ministry of Finance and Development Planning performed the financial and operational audit of the Private Sector Development Initiatives (PSDI). In May 2014, MFDP entered into a Memorandum of Understanding with the Liberia Bank for Development and Investment (LBDI) to partner and establish an account (GE Fund) through which the borrowers would receive their loans.
The report also establishes that a Memorandum of Understanding was reached between MFDP and LBDI to run the PSDI loan activities collectively, and customers’ assessment-vetting was executed using MFDP. However, the assessment vetting performed with the aid of the MFDP-PSDI Desk furnished many loopholes for default. For instance, there was no collateral to lower the mortgage; many debtors used the borrowed finances as a begin-up for their corporations, while there’s no evidence of a complete marketplace survey on the report. This created a serious impediment to restoration, thereby defeating the venture’s objective for the revolving fund.
The modus operandi of the MOU, which becomes signed via MFDP, MOJ, and LBDI, outlines as follows: the Ministry of Finance shall advise beneficiaries of the GE Fund to LBDI and put up utility packages containing the following: commercial enterprise registration, enterprise inspiration/plan, and tax clearance, among others.
Loans were dispensed to both groups owned by MFDP staff or groups with whom they have close connections, “and a number of those agencies have now not paid a cent in opposition to their obligation,” the report says. The companies encompass LELAH INC (US$40,000), Pure Life Incorporated (US$65,000), People’s Water Company Liberia LTD (US$65,700), South East Water Company (US$75,000), and Zainab Business Center (US$20,000).
