An Evaluation of the Impact of Microfinance Credit Market on Commercial Banking in Sierra Leone: The Case of BRAC and Rokel Commercial Bank (Sierra Leone), Limited

Sheka Bangura; Festus Bernard Massaquoi; Daniel Kasim Sesay; Joseph Sasay Kanu

doi:doi:10.11648/j.rd.20220302.20

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An Evaluation of the Impact of Microfinance Credit Market on Commercial Banking in Sierra Leone: The Case of BRAC and Rokel Commercial Bank (Sierra Leone), Limited

Sheka Bangura, Festus Bernard Massaquoi, Daniel Kasim Sesay, Joseph Sasay Kanu

Published in Research & Development (Volume 3, Issue 2)

Received: 26 May 2022 Accepted: 20 June 2022 Published: 27 June 2022

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Abstract

The multiplicity of Microfinance Institutions in the country of Sierra Leone has increased the compounded problems faced by Commercial Banks as active partners in the credit market. The Bank of Sierra Leone, the Central Bank in the Country, through its other Financial Institutions department, created the enabling environment for MFIs to thrive. Most of these MFIs are accredited to serve the same customers of the commercial banks with an overall effect on the profit margins of banks because of the seeming attractive nature of MFIs when it comes to loans. The study employed a survey design methodology to interview 24 managers at BRAC-Sierra Leone and Rokel Commercial Bank, Sierra Leone Limited. The study utilized both Secondary and Primary data with a statistical analyses of the collected data done through descriptive statistics, frequency matrices, charts, and multiple regression to produce answers on the study variables. The study reveals that 29.2% of the managers are satisfied with their credit market skills in their organizations (BRAC-Sierra Leone and Rokel Commercial Bank (Sierra Leone) Limited). The study also found out that BRAC-Sierra Leone saw a peak of its operating Income in 2017 with 75% rate as compared to Rokel Commercial Bank (Sierra Leone) Limited that witnessed a 60% increase of its operating Income in 2017. It was also found out that the Fixed Asset base for Rokel Commercial saw a dramatic increase of 5% from 2013-2014 signaling a significant change in asset and from 2015- 2016 a 10% increase was also witnessed by the Bank as compared to BRAC-Sierra Leone seeing a decrease of 20% in their fixed asset base, and a 5% reduction in 2015- 2016. The Multiple regression results of the study show that variables such as Probability Ratio (PR), Earnings Before Interest and Tax (EBIT), Net Operating Income (NOI are statistically significant. The study therefore recommends that government through the Central Bank of Sierra Leone should regulate and regularize MF1s in their credit system and try to encourage the commercial Banks to intensify their microfinance system with flexible application procedures to attract clients.

Published in	Research & Development (Volume 3, Issue 2)
DOI	10.11648/j.rd.20220302.20
Page(s)	135-148
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2022. Published by Science Publishing Group

Keywords

Credit Market, Microfinance, BRAC-Sierra Leone, Rokel Commercial Bank Sierra Leone Limited, Financial Performance

References

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APA Style

Sheka Bangura, Festus Bernard Massaquoi, Daniel Kasim Sesay, Joseph Sasay Kanu. (2022). An Evaluation of the Impact of Microfinance Credit Market on Commercial Banking in Sierra Leone: The Case of BRAC and Rokel Commercial Bank (Sierra Leone), Limited. Research & Development, 3(2), 135-148. https://doi.org/10.11648/j.rd.20220302.20

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ACS Style

Sheka Bangura; Festus Bernard Massaquoi; Daniel Kasim Sesay; Joseph Sasay Kanu. An Evaluation of the Impact of Microfinance Credit Market on Commercial Banking in Sierra Leone: The Case of BRAC and Rokel Commercial Bank (Sierra Leone), Limited. Res. Dev. 2022, 3(2), 135-148. doi: 10.11648/j.rd.20220302.20

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AMA Style

Sheka Bangura, Festus Bernard Massaquoi, Daniel Kasim Sesay, Joseph Sasay Kanu. An Evaluation of the Impact of Microfinance Credit Market on Commercial Banking in Sierra Leone: The Case of BRAC and Rokel Commercial Bank (Sierra Leone), Limited. Res Dev. 2022;3(2):135-148. doi: 10.11648/j.rd.20220302.20

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@article{10.11648/j.rd.20220302.20,
  author = {Sheka Bangura and Festus Bernard Massaquoi and Daniel Kasim Sesay and Joseph Sasay Kanu},
  title = {An Evaluation of the Impact of Microfinance Credit Market on Commercial Banking in Sierra Leone: The Case of BRAC and Rokel Commercial Bank (Sierra Leone), Limited},
  journal = {Research & Development},
  volume = {3},
  number = {2},
  pages = {135-148},
  doi = {10.11648/j.rd.20220302.20},
  url = {https://doi.org/10.11648/j.rd.20220302.20},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.rd.20220302.20},
  abstract = {The multiplicity of Microfinance Institutions in the country of Sierra Leone has increased the compounded problems faced by Commercial Banks as active partners in the credit market. The Bank of Sierra Leone, the Central Bank in the Country, through its other Financial Institutions department, created the enabling environment for MFIs to thrive. Most of these MFIs are accredited to serve the same customers of the commercial banks with an overall effect on the profit margins of banks because of the seeming attractive nature of MFIs when it comes to loans. The study employed a survey design methodology to interview 24 managers at BRAC-Sierra Leone and Rokel Commercial Bank, Sierra Leone Limited. The study utilized both Secondary and Primary data with a statistical analyses of the collected data done through descriptive statistics, frequency matrices, charts, and multiple regression to produce answers on the study variables. The study reveals that 29.2% of the managers are satisfied with their credit market skills in their organizations (BRAC-Sierra Leone and Rokel Commercial Bank (Sierra Leone) Limited). The study also found out that BRAC-Sierra Leone saw a peak of its operating Income in 2017 with 75% rate as compared to Rokel Commercial Bank (Sierra Leone) Limited that witnessed a 60% increase of its operating Income in 2017. It was also found out that the Fixed Asset base for Rokel Commercial saw a dramatic increase of 5% from 2013-2014 signaling a significant change in asset and from 2015- 2016 a 10% increase was also witnessed by the Bank as compared to BRAC-Sierra Leone seeing a decrease of 20% in their fixed asset base, and a 5% reduction in 2015- 2016. The Multiple regression results of the study show that variables such as Probability Ratio (PR), Earnings Before Interest and Tax (EBIT), Net Operating Income (NOI are statistically significant. The study therefore recommends that government through the Central Bank of Sierra Leone should regulate and regularize MF1s in their credit system and try to encourage the commercial Banks to intensify their microfinance system with flexible application procedures to attract clients.},
 year = {2022}
}

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TY  - JOUR
T1  - An Evaluation of the Impact of Microfinance Credit Market on Commercial Banking in Sierra Leone: The Case of BRAC and Rokel Commercial Bank (Sierra Leone), Limited
AU  - Sheka Bangura
AU  - Festus Bernard Massaquoi
AU  - Daniel Kasim Sesay
AU  - Joseph Sasay Kanu
Y1  - 2022/06/27
PY  - 2022
N1  - https://doi.org/10.11648/j.rd.20220302.20
DO  - 10.11648/j.rd.20220302.20
T2  - Research & Development
JF  - Research & Development
JO  - Research & Development
SP  - 135
EP  - 148
PB  - Science Publishing Group
SN  - 2994-7057
UR  - https://doi.org/10.11648/j.rd.20220302.20
AB  - The multiplicity of Microfinance Institutions in the country of Sierra Leone has increased the compounded problems faced by Commercial Banks as active partners in the credit market. The Bank of Sierra Leone, the Central Bank in the Country, through its other Financial Institutions department, created the enabling environment for MFIs to thrive. Most of these MFIs are accredited to serve the same customers of the commercial banks with an overall effect on the profit margins of banks because of the seeming attractive nature of MFIs when it comes to loans. The study employed a survey design methodology to interview 24 managers at BRAC-Sierra Leone and Rokel Commercial Bank, Sierra Leone Limited. The study utilized both Secondary and Primary data with a statistical analyses of the collected data done through descriptive statistics, frequency matrices, charts, and multiple regression to produce answers on the study variables. The study reveals that 29.2% of the managers are satisfied with their credit market skills in their organizations (BRAC-Sierra Leone and Rokel Commercial Bank (Sierra Leone) Limited). The study also found out that BRAC-Sierra Leone saw a peak of its operating Income in 2017 with 75% rate as compared to Rokel Commercial Bank (Sierra Leone) Limited that witnessed a 60% increase of its operating Income in 2017. It was also found out that the Fixed Asset base for Rokel Commercial saw a dramatic increase of 5% from 2013-2014 signaling a significant change in asset and from 2015- 2016 a 10% increase was also witnessed by the Bank as compared to BRAC-Sierra Leone seeing a decrease of 20% in their fixed asset base, and a 5% reduction in 2015- 2016. The Multiple regression results of the study show that variables such as Probability Ratio (PR), Earnings Before Interest and Tax (EBIT), Net Operating Income (NOI are statistically significant. The study therefore recommends that government through the Central Bank of Sierra Leone should regulate and regularize MF1s in their credit system and try to encourage the commercial Banks to intensify their microfinance system with flexible application procedures to attract clients.
VL  - 3
IS  - 2
ER  -

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Author Information

Sheka Bangura

Faculty of Agriculture and Natural Resources Management, Ernest Bai Koroma University of Science and Technology, Makeni, Sierra Leone
Festus Bernard Massaquoi

Faculty of Agriculture and Natural Resources Management, Ernest Bai Koroma University of Science and Technology, Makeni, Sierra Leone
Daniel Kasim Sesay

Faculty of Social and Management Sciences, Ernest Bai Koroma University of Science and Technology, Makeni, Sierra Leone
Joseph Sasay Kanu

Faculty of Agriculture and Natural Resources Management, Ernest Bai Koroma University of Science and Technology, Makeni, Sierra Leone

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APA Style

Sheka Bangura, Festus Bernard Massaquoi, Daniel Kasim Sesay, Joseph Sasay Kanu. (2022). An Evaluation of the Impact of Microfinance Credit Market on Commercial Banking in Sierra Leone: The Case of BRAC and Rokel Commercial Bank (Sierra Leone), Limited. Research & Development, 3(2), 135-148. https://doi.org/10.11648/j.rd.20220302.20

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ACS Style

Sheka Bangura; Festus Bernard Massaquoi; Daniel Kasim Sesay; Joseph Sasay Kanu. An Evaluation of the Impact of Microfinance Credit Market on Commercial Banking in Sierra Leone: The Case of BRAC and Rokel Commercial Bank (Sierra Leone), Limited. Res. Dev. 2022, 3(2), 135-148. doi: 10.11648/j.rd.20220302.20

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AMA Style

Sheka Bangura, Festus Bernard Massaquoi, Daniel Kasim Sesay, Joseph Sasay Kanu. An Evaluation of the Impact of Microfinance Credit Market on Commercial Banking in Sierra Leone: The Case of BRAC and Rokel Commercial Bank (Sierra Leone), Limited. Res Dev. 2022;3(2):135-148. doi: 10.11648/j.rd.20220302.20

Copy | Download

@article{10.11648/j.rd.20220302.20,
  author = {Sheka Bangura and Festus Bernard Massaquoi and Daniel Kasim Sesay and Joseph Sasay Kanu},
  title = {An Evaluation of the Impact of Microfinance Credit Market on Commercial Banking in Sierra Leone: The Case of BRAC and Rokel Commercial Bank (Sierra Leone), Limited},
  journal = {Research & Development},
  volume = {3},
  number = {2},
  pages = {135-148},
  doi = {10.11648/j.rd.20220302.20},
  url = {https://doi.org/10.11648/j.rd.20220302.20},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.rd.20220302.20},
  abstract = {The multiplicity of Microfinance Institutions in the country of Sierra Leone has increased the compounded problems faced by Commercial Banks as active partners in the credit market. The Bank of Sierra Leone, the Central Bank in the Country, through its other Financial Institutions department, created the enabling environment for MFIs to thrive. Most of these MFIs are accredited to serve the same customers of the commercial banks with an overall effect on the profit margins of banks because of the seeming attractive nature of MFIs when it comes to loans. The study employed a survey design methodology to interview 24 managers at BRAC-Sierra Leone and Rokel Commercial Bank, Sierra Leone Limited. The study utilized both Secondary and Primary data with a statistical analyses of the collected data done through descriptive statistics, frequency matrices, charts, and multiple regression to produce answers on the study variables. The study reveals that 29.2% of the managers are satisfied with their credit market skills in their organizations (BRAC-Sierra Leone and Rokel Commercial Bank (Sierra Leone) Limited). The study also found out that BRAC-Sierra Leone saw a peak of its operating Income in 2017 with 75% rate as compared to Rokel Commercial Bank (Sierra Leone) Limited that witnessed a 60% increase of its operating Income in 2017. It was also found out that the Fixed Asset base for Rokel Commercial saw a dramatic increase of 5% from 2013-2014 signaling a significant change in asset and from 2015- 2016 a 10% increase was also witnessed by the Bank as compared to BRAC-Sierra Leone seeing a decrease of 20% in their fixed asset base, and a 5% reduction in 2015- 2016. The Multiple regression results of the study show that variables such as Probability Ratio (PR), Earnings Before Interest and Tax (EBIT), Net Operating Income (NOI are statistically significant. The study therefore recommends that government through the Central Bank of Sierra Leone should regulate and regularize MF1s in their credit system and try to encourage the commercial Banks to intensify their microfinance system with flexible application procedures to attract clients.},
 year = {2022}
}

Copy | Download

TY  - JOUR
T1  - An Evaluation of the Impact of Microfinance Credit Market on Commercial Banking in Sierra Leone: The Case of BRAC and Rokel Commercial Bank (Sierra Leone), Limited
AU  - Sheka Bangura
AU  - Festus Bernard Massaquoi
AU  - Daniel Kasim Sesay
AU  - Joseph Sasay Kanu
Y1  - 2022/06/27
PY  - 2022
N1  - https://doi.org/10.11648/j.rd.20220302.20
DO  - 10.11648/j.rd.20220302.20
T2  - Research & Development
JF  - Research & Development
JO  - Research & Development
SP  - 135
EP  - 148
PB  - Science Publishing Group
SN  - 2994-7057
UR  - https://doi.org/10.11648/j.rd.20220302.20
AB  - The multiplicity of Microfinance Institutions in the country of Sierra Leone has increased the compounded problems faced by Commercial Banks as active partners in the credit market. The Bank of Sierra Leone, the Central Bank in the Country, through its other Financial Institutions department, created the enabling environment for MFIs to thrive. Most of these MFIs are accredited to serve the same customers of the commercial banks with an overall effect on the profit margins of banks because of the seeming attractive nature of MFIs when it comes to loans. The study employed a survey design methodology to interview 24 managers at BRAC-Sierra Leone and Rokel Commercial Bank, Sierra Leone Limited. The study utilized both Secondary and Primary data with a statistical analyses of the collected data done through descriptive statistics, frequency matrices, charts, and multiple regression to produce answers on the study variables. The study reveals that 29.2% of the managers are satisfied with their credit market skills in their organizations (BRAC-Sierra Leone and Rokel Commercial Bank (Sierra Leone) Limited). The study also found out that BRAC-Sierra Leone saw a peak of its operating Income in 2017 with 75% rate as compared to Rokel Commercial Bank (Sierra Leone) Limited that witnessed a 60% increase of its operating Income in 2017. It was also found out that the Fixed Asset base for Rokel Commercial saw a dramatic increase of 5% from 2013-2014 signaling a significant change in asset and from 2015- 2016 a 10% increase was also witnessed by the Bank as compared to BRAC-Sierra Leone seeing a decrease of 20% in their fixed asset base, and a 5% reduction in 2015- 2016. The Multiple regression results of the study show that variables such as Probability Ratio (PR), Earnings Before Interest and Tax (EBIT), Net Operating Income (NOI are statistically significant. The study therefore recommends that government through the Central Bank of Sierra Leone should regulate and regularize MF1s in their credit system and try to encourage the commercial Banks to intensify their microfinance system with flexible application procedures to attract clients.
VL  - 3
IS  - 2
ER  -

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