Liberia: Don't Fix Bad Loans By Killing Good Credit

What the report says

An editorial published by the Liberian Observer and distributed by AllAfrica argues that Liberia should not respond to its non-performing loan problem by restricting credit broadly. The piece was published in Monrovia on 10 September 2026 and is framed around the National Non-Performing Loans Resolution Conference, where World Bank Country Manager Georgia Wallen linked the cleanup of bad loans to Liberia’s wider growth and employment goals.

The article says the scale of the problem is significant: non-performing loans were about 19% of total loans at the end of 2024 and later fell to 12.5%, though the decline was mainly due to restructuring and write-offs rather than strong repayment. It also notes that private-sector credit remains low relative to GDP, the loan-to-deposit ratio is weak, and many businesses cite access to finance as a major obstacle.

Rather than urging banks to abandon prudence, the editorial calls for lending practices that better share and price risk. It points to options such as cash-flow-based lending, stronger credit reporting, movable collateral, credit guarantees, longer loan terms where appropriate and earlier restructuring for viable borrowers. The article also highlights the World Bank-financed LIFT Project, saying its US$6 million line of credit reached 253 micro, small and medium-sized enterprises with no non-performing loans, and suggests that experience should be studied for lessons.

The central argument is that Liberia should aim for more good loans, not fewer loans overall, because tighter credit alone may improve bank metrics without creating jobs or expanding productive businesses.