Methods of Payment can be arranged via internationally accepted payment methods such as confirmed irrevocable letters of credit (LC), bills of collection, and open accounts. Some banks offer methods such as online banking, electronic or Swift International transfers, remittances, foreign exchange, and mobile transfers or payments. They also offer debit cards, loans, investment solutions, e-products, term deposit, and microfinance. For example, Ecobank, Guaranty Trust (GT) Bank, International Bank (IB), and the United Bank for Africa (UBA), and Liberia Bank for Development and Investment (LBDI) offer international Visa debit card services for customers. Ecobank, UBA and GT Bank facilitate payments for goods and services using a point of sales terminal (POS) at supermarkets, some hotels, and some large merchandise stores. Their ATM services are connected to global electronic banking networks. There are numerous intermediate financial services providers across the country, such as licensed foreign exchange bureaus, microfinance institutions, credit unions, rural community finance institutions, village savings and loan associations (VSLAs), a development finance company, mobile money services, and insurance companies.
In 2022, the CBL continued reforms to support digital financial services. The number of mobile money agents is rising significantly because the CBL encourages financial institutions to integrate with mobile network operators outside of the national electronic payment switch. The government is increasing the use of mobile money to pay salaries to civil servants in rural areas, to pay vendors and contractors, and to collect taxes. Many businesses and individuals have begun using the mobile payment system and available digital financial services to pay taxes and conduct routine financial transactions. There is potentially high demand for the services given the country’s poor financial infrastructure and the risks associated with keeping cash at home, but the lack of a national switch limits mobile money’s growth potential for now.
Traveler’s checks and credit cards are not generally accepted except by a few large hotels and supermarkets. Many commercial banks operate MoneyGram and Western Union outlets for payments and for domestic and international electronic fund transfers.
The CBL has abolished a requirement that 25 percent of money transfers from abroad for personal remittances must be in Liberian dollars and 75 percent in U.S. dollars. Fees for currency exchange as well as wire transfers can be high and may slightly vary from bank to bank. The CBL requires transferring banks to file normal cash transaction reports and, depending on the amount of transfer, the waiting period ranges from a few hours to three business days. CBL regulations limit individuals without bank accounts to two over-the-counter transfers of up to US $5,000 within a 30-day period. There is no credit rating system or agency, but banks often rely on the CBL’s manual Credit Reference System (CRS), which provides information to banks and non-bank financial institutions about borrowers’ credit history, including any derogatory information. Banks report that the system is useful for risk management in the financial sector, and it is helpful producing credit records on both current and potential borrowers. The CBL has a centralized Collateral Registry System used by commercial banks, microfinance institutions, and non-bank financial institutions to register security interests in movable property only. Its primary objective is to create access to finance for businesses, especially micro, small, and medium businesses. Several businesses, especially those in the informal sector, continue to use different kinds of movable assets as collateral to secure loans through the CRS.
For more information about the methods of payment or other trade finance options, please read the Trade Finance Guide.
Banking Systems
The Central Bank of Liberia (CBL) oversees the financial sector in Liberia. Banking services are provided by nine commercial banks that are all foreign owned except for Liberia Bank for Development and Investment (LBDI). In 2022, the CBL reported that the banking system remained generally stable with banks showing improved balance sheets due to the recovery of overall economic activity following the COVID-19 pandemic. The CBL noted a high non-performing loan (NPL) rate of 16.4 percent—above its 10 percent regulatory threshold—as a downside risk. The CBL said it is taking action to address non-performing loans and instituting unspecified monetary policy efforts to strengthen asset quality.
Most banking institutions can provide some short-term trade financing and operating capital to businesses that have good credit records. Historically, commercial banks have had no domestic instruments into which to place liquidity. However, the CBL does offer treasury bills in Liberian dollars. Foreign banks or branches can establish operations in Liberia subject to CBL regulation.
Some limitations of the banking system might impact operations for U.S. businesses, particularly outside of Monrovia. They include the obstacles to domestic travel—such as poor roads, lack of affordable electricity, and unreliable communication links—increasing the risk of accepting collateral based outside Monrovia. Also, the unreliable land title system hampers access to credit in general, especially for local entrepreneurs. There is a non-bank financial sector, including licensed, regulated, and supervised institutions. Most of these institutions, particularly those in the informal sector, make short-term, high-interest rate loans to their members. Some of those operating in the informal sector offer anonymity to those seeking loans or exchanging currency, which raises concerns about the possibility of money laundering or terrorist financing.
Foreign Exchange Controls
Liberia has a managed floating exchange rate system, with Liberian and U.S. dollars being legal tender. There are no restrictions or limitations placed on foreign investors in converting, transferring, or repatriating funds associated with an investment (e.g., remittances of investment capital, earnings, loans, lease payments, and royalties). Liberian law allows for the transfer of dividends and net profits after tax to investors’ home countries. The Investment Act permits the unrestricted transfer of capital, profits, and dividends “through any authorized dealer bank in a freely convertible currency.” Therefore, funds associated with any form of investment can be freely converted into any world currency. The CBL’s regulation concerning transfers of foreign currency stipulates that every business, entity, or individual making a foreign transfer of funds may do so without limitation of the amount to be transferred. However, the amount to be transferred must have been in an entity’s bank account for no less than three banking days prior to the transfer. The CBL displays, and requires commercial banks to display, the official market exchange rates but the prevailing market rates largely fluctuate based on market demand and supply forces. The U.S. dollar can be freely exchanged for Liberian dollars at commercial banks, licensed foreign exchange bureaus, petrol stations, and large supermarkets. This has resulted in a dual currency arrangement that sometimes exerts additional pressure on the Liberian dollar due to preferences for the U.S. dollar for most transactions involving imported goods.
It is advisable for foreign investors to conduct foreign exchange operations with commercial banks or established licensed forex bureaus. Large-scale business and government transactions are mostly conducted in U.S. dollars, while retail or day-to-day routine transactions are conducted in either currency. Contracts and tax agreements are typically specified in U.S. dollars, and about 70 percent of taxes are paid in U.S. dollars. There are many large foreign exchange bureaus as well as small scale foreign exchange operators all over the country, some of which are not registered with CBL. However, it may take several days to exchange large sums of money due to a shortage of foreign exchange. Remittance inflows are a major source of foreign exchange in the Liberian economy. Transfers of more than US$10,000 must be reported to the CBL, and no more than US$7,500 in foreign currency banknotes can be moved out of the country at any one time.
U.S. Banks and Local Correspondent Banks
One of Liberia’s nine commercial banks, International Bank of Liberia, Limited (IBLL), is partially U.S-owned. IBLL partners with Pan African Capital Group (a Washington-based investment banking financial entity), Databank Group, and Trust Bank of the Gambia, and its correspondent banks are Ghana International Bank Plc, Bank of Beirut, MEAB Bank of Lebanon, and BMCE Bank International. There is a limited number of correspondent banking relationships in Liberia. The U.S. Embassy in Monrovia is not aware of any specific country programs currently offered in Liberia by the Export Import Bank of the United States. The Nigerian-owned United Bank for Africa (UBA) has branches in about 20 African countries, with subsidiaries in New York and London, while Ecobank operates in several African countries, including Togo where its headquarters, named Ecobank Transnational, is located.
Further details on financing in Liberia can be found in the 2023 Liberia Investment Climate Statement.