Story and pictures by Peter Saling, Director of Programs
Volunteers for Economic Growth Alliance (VEGA)
In 2008, Jacqueline Dekoe started her business, Jacqueline’s Production, in Monrovia with five coconuts, a cup of sugar and the equivalent of US $1. Before going into business, Jacqueline had fled to Togo during the Liberian civil war. There, while a refugee student, she noticed food sellers adding value to produce such as cassava, plantains and breadfruit, and selling their products at local markets. This sparked Jacqueline’s interest in food processing and inspired her to start her own business selling snack foods after returning to her homeland.
Jacqueline singlehandedly managed the production, marketing and delivery of her snacks. The members of her community quickly became hooked. She could not meet the growing demand. Jacqueline tried to get a bank loan to fund her expansion, but without a business plan for her company, the banks were unwilling to lend.
In stepped the Investing for Business Expansion (IBEX) Program. IBEX is funded by USAID and assists business owners in accessing funds made available through banks that are supported by USAID’s Development Credit Authority (DCA). The DCA frees local credit mechanisms by providing a partial guarantee to loans. Since its founding in 1999 through 2013, the DCA has facilitated USD 3.1 billion of credit in 71 countries. It has experienced a default rate of only 1.85%, thus costing relatively little to US taxpayers.
In Liberia, the four-year IBEX program is implemented by the non-profit International Executive Service Corps (IESC), through the Volunteers for Economic Growth Alliance (VEGA). The program has three components. First, it provides technical support and capacity building for small and medium (SME) sized businesses, such as Jacqueline’s, in the agriculture, renewable energy, infrastructure, construction, general merchandise, transportation and hospitality chain sectors.
Secondly, it provides technical support and capacity building for its partner banks, IB Bank and EcoBank-Liberia, to facilitate lending to SMEs and encourage lending to qualified small business using the DCA guarantee. IBEX allows partner banks to become more comfortable lending to the SME sectors through training bank staff and through borrower preparedness exercises, e.g business plans, and screening. Meanwhile the DCA guaranty helps lower their risk for lending to borrowers in relevant sectors through a 50% risk-share of any net loss on their loans.
Finally, IBEX works with the Government of Liberia and private business development services (BDS) providers, such as accountants, to develop public and private resources to provide these same services, linking businesses to banks, in order to ensure sustainability once IBEX ends.
In Jacqueline’s case, IBEX’s Enterprise Development Specialists helped her to prepare a business plan. This led to her business receiving a USD 35,000 loan. She used the money to purchase a truck and several processing machines that helped her increase her output and lower her production costs. Today, Jacqueline’s Production employs nine workers and is worth US $80,000. Jacqueline’s coconut and plantain chips are now found in local shops and supermarkets throughout the country. The business serves as an example for other Liberians interested in becoming entrepreneurs.