A new 2025 report by the African Development Bank (AfDB) revealed that only 14% of Liberian firms have access to bank loans, significantly lower than the Sub-Saharan Africa (SSA) regional average of 22%.
The report highlights the limited financial access facing the country’s small and medium enterprises (SMEs), which make up the backbone of Liberia’s private sector.
According to the AfDB, approximately 97% of SMEs in Liberia are registered as sole proprietorships, a factor that severely limits their ability to secure financing and achieve long-term sustainability.
“About 97% of SMEs are registered as sole proprietors. Only around 14 % of all Liberian firms have access to bank loans, compared to the Sub-Saharan Africa (SSA) regional average of 22 %.” African Development Bank (AfDB), 2025 Report.
Liberia’s private sector remains relatively small and highly informal, with most businesses operating outside of formal legal frameworks.
There are about 10,000 registered companies in Liberia, the majority of which are micro and small enterprises.
Data from the 2017 World Bank Enterprise Survey shows that SMEs represent 91% of Liberian businesses, while large enterprises make up just 9%.
Despite these challenges, financial inclusion has shown gradual improvement since the introduction of mobile money in 2011, which has become a key driver of access to financial services.
The AfDB report also underscores the limited scale of business operations.
Around 80% of businesses employ fewer than 20 people, while only 13% have between 20 and 100 employees.
A 2019 USAID report further noted gender disparities in business ownership: 62% of business owners are male, compared to 35% who are female.
Liberia’s private sector contributes over 50% of the country’s GDP, driven by economic activities in sectors such as mining, oil and gas, forestry, and agriculture.
Challenging Business Environment
While the Liberian government acknowledges the crucial role of the private sector in economic growth and job creation, persistent informality hampers the development of formal enterprises.
Key obstacles include limited access to finance, poor infrastructure, and a weak business-enabling environment.
The report points to regulatory challenges, governance issues, and bureaucratic inefficiencies as major barriers to private sector growth.
Business procedures are often unclear and non-transparent, while the high cost of doing business further discourages sustainability.
As a result, the average lifespan of a startup in Liberia is just six months to one year.
In an effort to improve the business climate, the government has enacted several pieces of legislation aimed at supporting private enterprise.
However, these measures have yet to produce meaningful change. According to the AfDB, despite policy efforts, the intended benefits-such as cost reduction and streamlined regulatory processes-have not materialized.
Ultimately, the report suggests that without stronger implementation and governance, Liberia’s private sector will continue to struggle with systemic challenges that undermine its growth potential.
