Liberia is moving to establish a state-owned bank dedicated to financing agriculture, as authorities seek to tackle chronic credit shortages in a sector that employs most of the population but receives only a small share of bank lending.
The Senate in December 2025, passed a bill creating the Agriculture Enterprise Development Bank of Liberia, according to local media outlet The Liberian Investigator. The legislation still requires approval by the House of Representatives and the president’s signature before it can become law.
Supporters of the initiative say the new institution is designed to correct a long-standing imbalance in Liberia’s financial system, where commercial banks have largely shunned agriculture despite its central role in the economy.
“The intent is to address the structural problem of limited access to credit for farmers and agro-industrial businesses,” Senator Joseph Jallah told lawmakers during deliberations on the bill.
Agriculture accounted for just 4.1 percent of total bank lending in 2024, according to the Central Bank of Liberia’s latest annual report, underscoring the scale of the financing gap.
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Liberia’s experience mirrors a broader challenge across sub-Saharan Africa, where agriculture often employs more than half of the workforce but attracts less than 10 percent of formal bank credit. Commercial lenders tend to view farming as high-risk, citing exposure to climate shocks, volatile prices, weak infrastructure and the lack of acceptable collateral.
In Liberia, these constraints are compounded by limited banking services in rural areas, where most farmers operate on a small scale and outside formal value chains.
Through the proposed Agriculture Enterprise Development Bank, the government aims to expand access to financing for thousands of smallholders and rural enterprises. Authorities say the rollout would be gradual and based on partnerships with government agencies, existing financial institutions, farmer organisations and development partners.
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Unlike traditional banks, the new institution is expected to offer products tailored to agricultural cycles, such as seasonal loans, longer grace periods and flexible repayment schedules linked to harvests.
“The idea is not just to lend money, but to provide financing that matches the realities of farming,” Jallah said, adding that the bank would be designed to support both primary production and agro-processing.
Beyond credit, the bank is expected to provide complementary services, including technical assistance, extension support, facilitation of access to crop and livestock insurance, and help linking farmers to markets. Policymakers argue that such an integrated approach is essential to improving productivity and reducing default risks.
Agriculture is Liberia’s largest employer and the backbone of rural livelihoods, yet domestic production remains insufficient to meet national food demand. The country remains heavily dependent on imports for staples such as rice, wheat and edible oils.
In 2024, Liberia imported nearly $396.4 million worth of food products, according to central bank data — a significant burden for an economy constrained by limited foreign exchange earnings.
“For us, strengthening agriculture is not optional,” Jallah said. “It is a national priority if we are serious about food security, jobs and reducing import dependence.”
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Successive governments have pledged to revive the sector, but progress has been uneven, hampered by weak infrastructure, limited mechanisation and underinvestment. While donor-funded projects and microfinance initiatives have provided some support, access to medium- and long-term financing has remained scarce.
Analysts caution that the effectiveness of the new bank will depend on its governance, capitalisation and ability to operate on sound commercial principles while pursuing development goals.
State-owned banks in Africa have often struggled with political interference and weak loan recovery, issues that have undermined their sustainability in the past. Ensuring strong oversight and professional management will be critical, observers say.
Still, proponents argue that the potential benefits outweigh the risks, particularly if the bank helps crowd in private financing and strengthen agricultural value chains.
“If properly structured, a specialised agricultural bank can play a catalytic role,” said a Monrovia-based economist, noting that improved access to finance could boost local production, stabilise food prices and support rural incomes.
For now, attention will turn to the House of Representatives and the presidency, as Liberia weighs whether the new bank can deliver on its promise to transform agricultural financing and reduce the country’s heavy reliance on imported food.
