Saleeby Reminds LBDI of Founders’ Vision

MONROVIA – Former Liberian Bank for Development and Investment (LBDI) president, Elie Saleeby, has reminded the bank’s current management and members of the board of directors not to depart from the vision of the bank’s founders as a development bank.

“As a consequence of more than a decade of civil strife and economic disruption, the country has seen a near-complete destruction of its very economic fabric, with the result that many businesses, both Liberian and foreign-owned, have been forced to close, the real productive sector virtually moribund and the country’s limited entrepreneurial class, almost extinct,” Saleeby observed.

“Herein lies the challenge to the Board of Directors and Management of LBDI to re-embrace its founders’ vision as an effective vehicle for the provision of term financing for productive economic enterprises, and the catalyst for development of an indigenous entrepreneurial class.”

The Liberian financial expert was also quick to add, “This is not a departure for LBDI, it is simply a recognition of the bank’s raison d’être.”

Saleeby said he found it ‘troubling’ as a Liberian, and especially as one who has a history with the LBDI to hear talk of ‘rebranding’ or redefining LBDI into a more complete commercial bank, to the exclusion of its traditional development banking activities.

LBDI was created by an Act of the Legislature in 1965 with the objective of engaging in development financing, especially to provide financing for local Liberian entrepreneurs. But the bank engaged in commercial banking in 1988, just 18 years after it was founded when its relevance and very existence appeared to be threatened. This threat was due mainly to the drying up of available and appropriate resources (mainly term financing) with which to finance new projects, as well as the paucity of viable projects.

Over the last 25 years in commercial banking, LBDI has maintained a commanding position in the area of savings deposit, accounting for about 70 percent of the total market value in the sector.

The former LBDI president (1973-1980), however, in strong remarks during the unveiling of the nearly US$3 million dollars Sinkor branch of the LBDI last Wednesday, pointed out that the LBDI’s foray into commercial banking was not foreseen in its original mandate. He reminded management that the bank had limited its activities mainly to development banking, in response to a then perceived need to mobilize much needed financial resources for investment into the productive sectors of the economy.

He indicated that the bank carried out this mission well while also developing an indigenous entrepreneurial class.

Saleeby, also a former Finance Minister and Central Bank of Liberia Governor, pointed out that it was purely a “defensive act” for the bank’s survival in 1988 when it engaged in commercial banking.

“It was very well intended to counter the unstable economic and political situation at that time that this strategic move was adopted…, to engage in commercial banking,” he explained.

Despite his call, however, for the LBDI to implement its founders’ vision, Saleeby commended the bank for having excelled in commercial banking.

“It is remarkable that LBDI has excelled in this area, despite many early impediments, and [that it] now stands as one of the pillars in the commercial banking sector,” he added.

He called on the people of Liberia to be proud of LBDI, their own bank, because “this achievement has been done by an all-Liberia management team.”

LBDI, he noted, is indeed a successful commercial bank, and, in this era of “universal banking,” stands to strengthen its position in the banking sector in particular and the economy in general, by providing a “full menu” of banking services.

Furthermore, he said, development banking can be profitable for the bank if its various activities were strategically integrated with appropriate financial resources and policies. He said the challenge to achieving this should be to develop a solid banking platform that will enable the bank to be a truly multi-purpose “universal bank,” responding to the urgent needs of the economy without compromising its viability.

In closing, Saleeby expressed his profound hope the LBDI will in the near future be dedicating projects which are the fruits of the bank’s development financing assistance, be it term loans, equity investment or both.

“This, I believe, will further legitimize LBDI’s role in the economy, and also be a fitting tribute to the original founders such as Frank Stewart, P. Clarence Parker and Steven Tolbert,” he concluded.