Corruption may largely be blamed for the decade-long slump in the Liberian economy, but most economists agree that part of the problem lies in the collapse of the banking system for various reasons, the main culprit being war.

But if certain key comments and developments regarding the revival of the economy are considered, observers say, it seems likely that Liberia’s economy nightmare is fizzling out.

“But is it; will it?” is the reigning question in the minds of long-time readers of Liberia’s economic horoscope.

The Managing Director of the newly-dedicated United Bank for Africa (UBA)-Liberia, Ebele Edwin Ogbue, thinks it is. The Analyst Staff Writer, reports.

The Managing Director of UBA-Liberia, Ebele E. Ogbue, said the licensing of United Bank for Africa (UBA) to operate in Liberia indicates growing investor confidence in the Sirleaf Administration.

He emphasized that with this growing confidence is bound to come the revolutionizing of commercial banking in Liberia including improved, made-easy, modernized customer service.

The assertion was contained in the speech Mr. Ogbue, also chief executive officer (CEO) of the bank, delivered last Friday during the opening ceremony of United Bank for Africa (UBA) Liberia at a branch office on Bushrod Island in Monrovia.

He called the opening of UBA-Liberia “the marking of a key event” in the country and proceeded to remind his audience that comprised diplomats and special guests that a new day was dawn for the revival of the Liberian private sector, specifically the banking sector.

“It also marks increasing investors’ confidence in Liberia with the emergence and interest of foreign banks in the country.

“We are gathered here today as a result of that confidence and of our desire to strengthen the banking industry as well as provide quality and innovative financial products and services that will cater to the needs of everyone, from the ‘pehpeh’ driver to the corporate executive of a multinational organization,” CEO Ogbue noted.

He said the UBA banking conglomerate sees in Liberia, a great potential for development and growth.

“We see this dear country as brimming with economic potential from the progressive economic policies of this administration, to the rejuvenation and development of civil and corporate bodies, as more and more Liberians in the Diaspora resettle and investor’ confidence grows, translating into more jobs and a better lifestyle for its citizens. Today, UBA Liberia is taking its first steps to make this happen,” he said.

On what UBA is and what it hopes to offer the Liberian banking market, the UBA-Liberia managing director (MD) revealed that the UBA was an African bank with headquarters in Lagos, Nigeria.

He said the incorporation of the UBA dates back to the early 1960s, noting that UBA-Liberia is the result of the merger of the 3rd largest bank, the old UBA and the 5th Standard Trust.

The Nigerian banking conglomerate has since added to its sleeves the Continental Trust Bank and more recently the Liberty Bank of Nigeria, he revealed further.

“From as far back as 1961 and with the consolidation of these two banks, we have grown from strength to strength and size with a balance sheet of an excess of 14 billion USD as at the end of the last financial year of September 2007.

“We've over 6 million customer accounts and over 700 online branches spread across the length and breadth Nigeria alone. We have embarked on a 3 phased strategy to become the dominant financial services provider in Africa and beyond,” he said.

As part of its phased program, he said, UBA has embarked on an expansion drive to bring quality banking products and service to a number of African countries.

According to him UBA currently has branches in Ghana, Ivory Coast, Cameroon, Uganda, Cayman Island, New York in the United States and now, Liberia.
“We’ve also been issued licenses in S. Leone, B. Faso, Guinea and Mali and have a rep office in China,” he said.

Besides successfully annexing viable banks and setting up pioneer branches in key West African countries, he said, UBA has received several awards including the Corporate Social Responsibility Award, 2008; the Money Markets Innovation award, 2008; the Pure Genius Award for the ICT setup, 2007; the Global Excellence Banker Award, 2006; and the Bank of the Year award, 2006.

He also used the opportunity to erase the “deliberate or misinformed misconceptions” that given that the UBA is a Nigerian bank, it is a ‘419 organization’, a ‘fly by night investor’ or have been ‘exposed’ for fraudulent bank practices.

“Let me state here and now that if it were to be so, the Central Bank of Liberia, after months of due diligence would not have granted us even a provisional license to begin with.

“Neither would we have been granted a banking license early this year by the UK’s Financial Services Authority (one of the most stringent global financial regulators); we are the only Sub-Saharan bank with a full banking license in New York; the 1st and only African bank to obtain a banking license in the Cayman Island; the 1st Nigerian bank in Ghana, and, again we have made history as the 1st Nigerian bank in Liberia.

These, by all means, are no small feats as there are strenuous requirements that have to be met in compliance with international banking procedures with regard to the setting up of any financial institution,” MD Ogbue said.

Turning to UBA-Liberia, he said it was a subsidiary of UBA Plc that was incorporated as a private limited liability company on October 10, 2006.

He did not say as a “private limited liability bank” how UBA-Liberia plans to relate to its Liberian customers in terms of access, accounts, and benefits, but he noted that following a preparation period that began in October 2007, the bank was issued a full banking license on July 17, 2008.

“Today, we are at the opening ceremony of our first branch after facing various challenges to make this a reality. Notwithstanding the opening of this branch, we intend to roll out and operate over 15 branches within the country by 2010,” he said.

CEO Ogbue then announced that UBA-Liberia has tailored its programs especially with the average Liberian in mind and for the multinational companies operating in the country.

“We have the “No Wahala Loan and Account”, for those who cannot afford the minimum account requirements, but yet would like to start the culture of saving and investment in their businesses.

“There’s the UBA Gold Account (a hybrid savings account that offers customers the benefit of issuing checks on their savings account) and a host of electronic banking products such as U Direct, U Mobile, and PayDirect,” he said.
He said the bank has set up an automatic teller machine (ATM) that will be easily accessible to customers.

“We shall also offer MoneyGram services, UBA Remit and Non-Resident Accounts for Liberians in the Diaspora,” he revealed further. According to him, the UBA-Liberia, which operates on the philosophy of “The Customer Is King”, will meet the banking needs of all Liberians irrespective of age, sex, or socio-economic and political backgrounds.

“We are here to revolutionize the banking industry and provide quality service at a go with our vibrant staff of dedicated men and women who share the UBA vision and our core values of - Honesty, Integrity, Empathy and Resilience,” he said.

While some have no doubt that the establishment of yet another foreign commercial bank in Liberia indicated confidence in the Sirleaf Administration and that that will give a thrust to the nation’s economic revival agenda, some say it is too early to rejoice – that there are just too many obstacles to surmount and old banking habits, assumptions, and misconceptions to shed.

According to them, it was one thing to establish a commercial bank and quite another to provide the financial foundation for the growth of the private sector.
“Have you asked yourself why despite the existence of all these commercial banks, Liberians still find it difficult to engage and stay in business?

That is because the banks do not trust ordinary Liberians who possess great entrepreneurial spirit but who do not have money to invest,” said shop owner Tim K. Kollie of Old Road Market.

He said the bank, instead of relying on identity verification and trusting the criminal justice system of the country, required thousands of U.S. dollars in collateral before granting loans at high interest to poor Liberians.

“Sometimes a quarter of the loan goes in bribes to bank employees before it is released, making it difficult for the borrower to raise enough cash to follow the repayment schedule.

" If I, a poor businessman, wants a loan that requires a collateral of 50 to 75 thousand United States dollars, then I think it is better that I do my one-two, one-two,” Kollie said, giving reasons why many Liberians have very little or nothing to do with banking.

He said one way in which the banks would help the Liberian private and informal sectors grow into a business sector capable of saving in the banks was for them to open their doors to petty traders as well as middle-level indigenous businesses.

“Some say the average Liberian can’t be trusted to pay back loans borrowed from the bank. This is largely because the banks charge interests without considering the ability of the debtor to pay, without realizing that the debtor is also a starter who has no formal knowledge in investing through the banks.

They provide no education at that level. Instead they lend easily to smartly dressed and apparently educated Liberians, and even foreigners posing as Liberians, who are not necessarily investors. There is where the major problem lies,” said another observer, used clothes dealer David M. Dorley.

David said if the UBA-Liberia or any other commercial bank were to make a difference in Liberia, they needed to appeal to the petty traders since 90% of Liberians operated from that level often without the collateral required by banks currently operating in the country.

“Another area those wishing to make a difference need to look at is the amount required to open a bank account. Some banks require as much as L$5,000 to open an account and a minimum balance of L$1,000 to maintain that account.

This is too much for the poor woman at the Waterside Market who simply wanted to keep his money from robbers and by that earn a little interest if possible.

The requirement for opening bank account actually puts a block between small business men and women, thereby cutting the effect commercial banks would have on the lives of ordinary citizens and residents,” he said.

According to him instead of requiring property security, which due to the war many potential bank customers do not have in Liberia, it was revolutionizing for the banks to rely more on the power of the courts and credit bureaus to recovery their loans as it is done in many economies around the globe.

“Make the opening of bank account and the granting of loans easy, affordable, and part of business fun. Don’t make the process rigid and lend only to influential individuals in society including government officials who are not necessarily business people or who are not easily prosecutable.

Most banks that collapsed in the past dealt mainly with people who were knowingly not amendable to the banking or criminal laws of Liberia. This is must be avoided,” Dorley said.

He said any banking institution opening in Liberia with eyes only on the seeming virginity or greenness of the Liberian banking market without considering the drawbacks and historical mishaps of banking in Liberia would be playing upon a dangerous mirage.

“By and large, the customers’ confidence and trust must be tapped and retained.

This is because the banks and the customers and/or borrowers have many disappointing experiences with each other over the last half century that they seem to regard loan or saving loss inevitable shortcomings of banking in Liberia,” he said.

Analyst agree, noting that with noticeable gains in reform in the security and judicial sectors and President Sirleaf’s much-sung near-success in containing corruption in high places, there is indeed so much confidence generated that will revolutionize customer services and banking relations in the country.

If that happened, if customer services and banking relations are revolutionized in the country, they say, Liberia’s economy nightmare may be well on the way to fizzling out since sound banking makes sound, agile economy.