Credit Access for Responsible Extraction: Providing Incentives to Address Exploitation and Externalities in Sierra Leone's Artisanal Mining Sector

Abstract

Artisanal gold mining employs hundreds of thousands of people in Sierra Leone but faces two related problems. First, excluded from formal financial services, miners rely on informal lenders who charge high effective interest rates, squeezing both mine operators and the workers they employ. Second, the sector’s informality leaves workers with poor labor conditions. To address both, we are partnering with the local microfinance institution Munafa to develop an intervention that offers miners credit at lower, fixed interest rates, conditional on improvements in labor conditions. Through a census of mining operations and detailed surveys with operators and workers, we are documenting the scale of the informal sector, miners’ borrowing arrangements with informal lenders, and workers’ labor conditions. We plan to pilot the conditional loan product with miners in fall 2026.