As SLCB Gives Out Loans To Politically Exposed Persons… Le7.4 Billion Remains Unpaid
By Aruna Momoh Kargbo
The Government own bank, Sierra Leone Commercial Bank (SLCB) gave out loans totaling NLe235,511,756.00 without collaterals.
This was captured by the protector of the Sierra Leone public purse, Audit Service Sierra Leone (ASSL) in their recently published report recommending that the Bank implement stricter control so as to mitigate exposure risk.
According to the audit, out of the sum total of NLe235,511,756.00, Sierra Leone Commercial Bank (SLCB) gave out the sum of NLe 7,762,000.00 as loan to Parliamentarians which is equivalent to Le7,762,000,000.00 in old Leones.
The report maintained that the outstanding amount to be paid by Parliamentarians is NLe 7,406,805.00 which is equivalent to Le7,406,805,000.00 in old Leones, revealing that just the little sum of NLe355,195.00 has been paid by these politically exposed persons.
“We recommended that Management of the bank should review and adjust the collateral requirements in order to ensure adequate coverage for facilities granted aligning them with enhanced supervision; additionally, we recommend that the bank implement stricter controls to mitigate exposure risks,” the Audit Report stated.
In their response, the SLCB stated that Section 51 of the Bank of Sierra Leone Revised Prudential Guidelines for Commercial Banks 2022 provides room for the Bank to lend up to 10% of its capital base on an unsecured basis to a single obligor.
“In all cases noted by the auditors, management considered creditworthiness of the customers and made decisions based on these assessments. Also, the total outstanding balance on names listed in the annex was NLe190 million,” SLCB stated.
The Bank furthered that it is worth noting that these facilities are not all the same.
The ASSL noted that the bank confirmed that in some instances, facilities were issued with no collateral.
“In 2023, the bank also breached the single obligor limit of 10%. Therefore, the issue remains unresolved,” ASSL stated.
