World Bank Backs Liberia’s NPL Reforms to Boost Credit, Jobs

By Lewis S. Teh

MONROVIA, Liberia, September 11, 2026: The World Bank Group has pledged support for Liberia’s efforts to address non-performing loans (NPLs), warning that high levels of distressed debt continue to constrain bank lending, private-sector growth and job creation.

World Bank Group Country Manager Georgia Wallen said resolving the NPL problem is critical to building a financial system capable of providing affordable, appropriately structured and long-term financing to productive businesses across Liberia.

Speaking at the National Non-Performing Loans Resolution Conference at the Ellen Johnson Sirleaf Ministerial Complex in Monrovia, Wallen said the objective should extend beyond reducing bad loans to creating conditions for sustainable credit expansion.

“Today is about spurring collective action to nurture a financial system that can provide affordable, appropriately structured, long-term credit to productive businesses across Liberia,” she said.

The conference, held under the theme, “Promoting Access to Finance to Support Private Sector Growth and Job Creation,” brought together representatives of government, the Judiciary, commercial banks, development partners and international experts from Nigeria, Ghana, Egypt, Kenya and the United States.

Citing the World Bank-supported 2026 Financial Sector Assessment, Wallen said Liberia’s financial system remains shallow and heavily dependent on banks, with domestic credit to the private sector amounting to only about 15 percent of gross domestic product.

She said NPLs accounted for about 19 percent of total loans at the end of 2024, well above prudential benchmarks.

Although the ratio declined to 12.5 percent in 2025, Wallen said the improvement was driven largely by loan write-offs and restructuring rather than sustained cash recoveries.

She also disclosed that Liberia’s loan-to-deposit ratio remains around 35 percent, reflecting limited bank lending.

Nearly 40 percent of Liberian businesses surveyed last year identified lack of access to finance as their biggest obstacle, she said, compared with about 30 percent a decade earlier.

“High NPLs weaken bank profitability and lending capacity,” Wallen said.

She said the Financial Sector Assessment also identified weaknesses in credit information, slow debt recovery and insolvency processes, and the absence of a developed market for distressed assets.

Wallen outlined four priority areas for addressing the challenges, including strengthening trust within the financial system and improving borrower identification, credit reporting and the use of movable and immovable property as collateral.

She cited the recent launch of Liberia’s Enhanced Collateral Registry as an important step toward improving access to secured lending.

The World Bank official also called for reforms on both sides of the credit relationship, saying banks need stronger underwriting, governance and risk-management practices, while borrowers must improve record-keeping and repayment discipline.

She said the government also has a role to play by addressing legitimate payment arrears and strengthening expenditure commitment controls.

Wallen further called for distressed assets to be resolved quickly and transparently through stronger risk-based supervision, consistent loan classification, enforcement of prudential requirements and credible mechanisms for bank recovery and resolution.

She also stressed the need to link financial stability reforms with broader financial inclusion, including expansion of digital financial services accompanied by appropriate regulation, consumer protection and operational safeguards.

According to Wallen, the ultimate test of the reforms will be whether micro, small and medium-sized enterprises, including women- and youth-led businesses, farmers and companies outside Monrovia, can obtain financing on workable terms.

She said the World Bank Group is already supporting several initiatives aligned with the government’s ARREST Agenda for Inclusive Development.

Under the World Bank-financed Liberia Investment, Finance and Trade (LIFT) Project, implemented through the Ministry of Commerce and Industry and the Central Bank of Liberia, efforts are underway to expand access to finance, business development services and digital financial infrastructure.

Wallen said the project’s US$6 million line of credit has reached 253 micro, small and medium-sized enterprises, with no non-performing loans recorded among the beneficiaries.

She said the International Finance Corporation (IFC), the World Bank Group’s private-sector arm, is also supporting improvements to Liberia’s secured-transactions framework, expansion of digital credit and agent banking, and preparation of Liberian businesses for investment through the Local Champions Initiative.

“Together, these interventions address the full chain, from better financial infrastructure and capable enterprises to more confident lenders and additional private capital,” Wallen said.

She pledged the World Bank Group’s continued collaboration with the Central Bank of Liberia, government, financial institutions, businesses and development partners to translate recommendations from the conference into concrete reforms.

“This gathering is about realizing Liberia’s vision of stronger banks; more responsible borrowing; more effective institutions; and increased access to finance for productive enterprises—nationwide,” Wallen said.