Sierra Leone’s Journey Towards Digital and Financial Inclusion

  • July 07, 2021

  • Freetown, Sierra Leone

Wycliffe Ngwabe

Country Lead - Inclusive Digital Economies

Eric Sena Morttey

Inclusive Digital Financial Services Expert


According to the 2017 Findex data, close to one-third of adults, 1.7 billion are still unbanked.

About half of unbanked people include women, low-income households in rural areas or those out of the workforce. Financial inclusion has been identified as an enabler for 7 of the 17 Sustainable Development Goals and it is seen as a key enabler to reduce extreme poverty and boost shared prosperity. Since 2010, more than 55 countries have made commitments to financial inclusion. This is according to the 2018 World Bank Report.

Financial Inclusion in Sierra Leone

Despite having 14 commercial banks, 17 community banks, 50 microfinance institutions (MFIs), five of them deposit taking,three Mobile Money Operators, and 59 Financial Services Associations (FSA), only 12.4 percent of adults in Sierra Leone have a bank account.1 Again, the total number of persons with access to formal financial services, including mobile money is 19.8 percent.2 Most financial institutions are concentrated in the capital, Freetown and secondary urban areas like Kenema and Bo, leaving most people in other parts of the country cut-off from the financial system. Reasons include the high operating cost for institutions going into the rural and under-served areas of the country. Institutions have also not yet established a business case and sustainability plan for going into remote locations. Branchless banking and Digital Financial Services (DFS) holds promise to overcome this challenge. The United Nations Capital Development Fund (UNCDF) has been working with the Bank of Sierra Leone, government, private sector, international organizations and other stakeholders to support Sierra Leone towards having an inclusive digital economy.

How Ebola triggered the development of DFS in Sierra Leone

UNCDF has been providing technical assistance and investment grants in digital financial services since December 2014 when it was asked to implement the Payments Programme for Ebola Response Workers with the National Ebola Response Centre, resulting in successful demonstration of digital payments that led to an overall savings of US$ 10 million for the Government of Sierra Leone.

At the height of the Ebola crisis, digitalization reduced turn around time for payments from over one month to around one week, putting an end to payment-related strikes. In doing so, digital payments strengthened Sierra Leone’s capacity to contain the disease, treat those infected, and ultimately save lives.

The devastation of the Ebola epidemic in 2014 to 2015 also underscored institutional weaknesses. Poor infrastructure and high operating costs were impediments to the expansion of access points. In addition, the lack of identification constituted a sizable barrier to account ownership in Sierra Leone. Lack of financial knowledge, understanding and awareness was a significant barrier to accessing formal financial services. The lack of suitable products to meet the needs of the unbanked and the underbanked further limited their opportunities to engage with the formal financial sector. In order to address these challenges, the National Financial Inclusion Strategy (NFIS) 2017-2020 was developed with support from UNCDF.

Making financial services available, accessible and affordable

The Sierra Leone’s National Financial Inclusion Strategy (NFIS) aimed at making financial services available, accessible and affordable to all Sierra Leoneans and support an inclusive and resilient private sector led growth. The strategy was developed based on the aforementioned weaknesses identified. Six key priorities of the strategy were:

  1. Responsive policy, regulation, and coordinated action
  2. Client-centric products and services
  3. Digital financial services
  4. Access to finance for MSMEs
  5. Financial literacy, education and consumer protection
  6. Data and measurement

Working groups were formed for each of these thematic areas comprising key stakeholders in the financial sector. The main objective of the working groups was to provide technical support in the implementation of the Strategy. The Financial Inclusion (FI) Secretariat in the Financial Sector Development Unit (FSDU) provided secretariat services.

The strategy aimed to transform the financial sector for the under-served and unserved segments of the population including people active in the country’s backbone, the agriculture sector and MSMEs. Access to finance for the agriculture sector and MSMEs remains a big challenge, often leaving most of the people with no other choice than resorting to informal options of accessing finance, thus making them vulnerable to financial distress, debt, and poverty.

The implementation of the Strategy was placed at the Financial Inclusion Secretariat at the Bank of Sierra Leone.

An evaluation of the NFIS underway

Sierra Leone’s National Financial Inclusion Strategy 2017-2020 officially ended in December 2020. UNCDF in partnership with The Bank of Sierra Leone (BSL) is conducting an evaluation of the NFIS to identify the achievements and challenges in the implementation of the strategy and to offer recommendations for the design and implementation of a next strategy.

UNCDF through a competitive process hired the services of an independent consulting firm in March 2021 to carry out a number of activities including desk review, consultations with stakeholders, online survey rollout, online survey analysis and data analysis. The consulting firm is expected to come up with a report containing the findings from the evaluation and offer recommendations by the end of July 2021. Watch out for the finding from this survey in the next blog.

1 World Bank 2018 Sierra Leone Financial Inclusion Project Fact Sheet

2 Patricia Laverley, Deputy Minister of Finance-14 Aug 2019