The former Minister of Commerce and Industry, Prof. Wilson K. Tarpeh has clarified that his transfer from the Ministry of Commerce and Industry by President George Weah was intended to fill in a major administrative gap at the Environmental Protection Agency (EPA) and has nothing to do with the Small Business Pro- Poor Development Fund.
“At no time was I ever involved in any scheme to divert monies intended for the Pro-Poor Loan Scheme,” Prof. Tarpeh said in response to recent media reports.
Prof. Tarpeh said facts provided by the General Auditing Commission (GAC) report cannot support the conclusion made by the newspaper articles – that the program is marred by corruption, fraud, and mismanagement.
According to him, in September, 2018, the Government of Liberia (GOL) made a commitment to assist small businesses given the constraints faced by small and medium enterprises (SMEs) in accessing affordable financing from Banks and other lending institutions.
The decision was also based on President George M. Weah’s desire to assist these Liberian businesses in this direction.
Accordingly, on in September, 2018, the Government of Liberia (GOL) made a commitment to assist these businesses.
The initiative, according to the former Commerce Minister is intended to provide financing opportunities to Small Medium Enterprises (SMEs), Micro Finance Institutions (MFIs) and Village Savings & Loans Associations (VLSAs) through fiscal stimulus for nationwide quick impact projects across the country with the view of providing job opportunities, capital formation, and wealth for the underprivileged in the society.
This scheme thus supports the Government’s Pro-Poor Agenda for Prosperity and Development (PAPD) which was launched in Ganta, Nimba County, 27th of October 2018.
He disclosed that a total of US$3,000,000 (Three Million United States Dollars) was committed as seed capital: US$1,000,000 (One Million United States Dollars) from Central Government and US$2,000,000 (Two Million United States Dollars) pledged by Liberia Bank for Development & Investment (LBDI).
Prof. Tarpeh noted that a Memorandum of Understanding (MOU) was signed between the LBDI (represented by its President & Chief Executive Officer) and the Government of Liberia (represented by the Minister of Finance & Development Planning (MFDP) and the Minister of Commerce and Industry – MOCI).
The key element of this MOU was the entire operation of the loan program (from receipt of an examination of loan applications to credit decisions and disbursement and collections) was the responsibility of LBDI.
He further explained that the bank was to use its normal standards to evaluate these loan applications and make the appropriate credit decisions or otherwise.
“The decision to leave the entire loaning process and operations to the LBDI using its own standard was to avoid the fiasco made by the Private Sector Development Initiative (PSDI) executed by the prior Government,” Prof. Tarpeh indicated.
The PSDI was a US$4 Million initiative intended to assist small Liberian businesses gain access to affordable resources to grow their businesses.
Instead of leaving the credit decision with the bank, it was the Ministry of Finance & Development Planning that told the bank who to give the loans to.
Said Prof. Tarpeh: This Government decided to avoid this platform for disaster; and therefore, the Government shifted the entire operations of the Program to the LBDI using its own standards for loan evaluations for credit decisions.
He emphasized though the Ministry of Commerce and Industry was never involved with the day-to-day administration of the loan, I took a strong stand as Minister of Commerce at the time to ensure that the loans were only disbursed to eligible and well-vetted businesses only.
He indicated that a steering committee comprising representatives of the LBDI, MFDP, MOCI and the Presidential Project Unit, was constituted to receive and review periodic reports submitted by the LBDI on the activities of the Program.
“Another key aspect of the MOU was the low interest rate of 4 percent per annum. In September 2018 or thereabout, the Government disbursed its full commitment of US$1,000,000 Which was deposited into an account opened for this program at the LBDI; and in December of that year, the Pro-poor Small Business Development Fund was officially launched by the President of the Republic,” Prof. Tarpeh pointed out.
Continuing, Prof. Tarpeh noted “unfortunately, the LBDI, up to the time of my departure from the Ministry of Commerce and Industry in September 2020, had not paid up its commitment of US$2,000,000. In other words, although a total of US$3,000,000 was committed to the project, only the US$1,000,000 paid by the GOL was available to the Program. There was therefore not $3,000,000 available to the Loan scheme.
He recalled when the then Deputy Minister for Small Business at the ministry willfully accused me of disbursing the loan from my office in cash and claiming no idea of the program operations I invited the General Auditing Commission (GAC) to conduct an appropriate audit of the scheme.
“In December 2020, the GAC released its report essentially rubbishing the accusations of wrongdoing and placing her at the center of the Scheme’s planning and execution. The report by its finding vindicated me for any wrongdoing or corruption,” Tarpeh emphasized.
He clarified that at no point in time he ever disbursed any loan or recommend any business entity to receive any money under this loan scheme.
Prof. Tarpeh also disclosed that findings regarding the slow pace of the loan disbursement, were discussed with the bank; and they promised to speed up their evaluation processes and credit decisions.
“As for the finding regarding the absence of the Justice Minister’s signature on the MOU, this was a harmless error that was correctible. In the absence of the Justice Ministry, I encouraged and called for the GAC audit of the process in order to help us understand what the lapses in the process were so as to make necessary corrections and adjustments before the continuation of disbursements. My call to the GAC was in the spirit of transparency and accountability,” Prof. Tarpeh concluded.