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The Sierra Leone Commercial Bank (SLCB) has come under renewed scrutiny following revelations in the 2024 Auditor General’s Report that the bank issued loans totaling NLe356,579,171.71 without collateral as of 31 December 2024. The findings have raised concerns about credit risk management and internal controls within one of the country’s largest financial institutions.
According to the audit, the unsecured loans were spread across six categories. Ordinary loans accounted for the largest share, totaling NLe125,642,642.38, followed by foreign loans of NLe107,500,000.00, overdrafts of NLe67,676,150.25, and agricultural credit facilities valued at NLe51,000,000.00. Smaller amounts were recorded under amortised loans at NLe4,664,136.74 and women’s banking loans at NLe96,242.34.
The report noted that SLCB’s total loan portfolio stood at NLe857,582,201.34 during the period under review, meaning that over 41 per cent of the bank’s lending was not backed by collateral. Auditors described this as a significant departure from standard banking practices, which typically require adequate security to mitigate default risk.
Audit Service Sierra Leone warned that the absence of collateral exposes the bank to increased credit risk, particularly in volatile sectors such as agriculture and foreign lending. The auditors recommended that SLCB take steps to secure facilities already granted and strengthen lending controls to prevent similar exposures in the future.
The findings come amid broader efforts to improve transparency, reduce non-performing loans, and boost confidence in Sierra Leone’s financial sector. Analysts note that given SLCB’s size and role in the economy, its lending practices have implications for both financial stability and public trust. While unsecured lending may be appropriate in limited cases, such as targeted development or inclusion-focused financing, observers say the scale of the collateral-free loans warrants close scrutiny.
As of the publication of the report, SLCB had not issued a public response. Audit Service Sierra Leone is expected to monitor the bank’s compliance with the recommendations in subsequent audit cycles.
