Sudan prepares for robust microfinance industry

Microfinance Focus, October 31, 2011: The Cabinet of the Republic of Sudan, approved recommendations presented in a report by Dr. Mohamed Khair Al-Zubair, Governor of the Central Bank of Sudan. Some of these recommendations include the issue of guarantees such as the salary, the retirement pension and the personal guarantee as well as granting preferential advantage to microfinance projects. The Cabinet approved to establish the Supreme Council to develop and follow-up policies to create a robust microfinance industry in Sudan.

The report showed that development in the microfinance sector did not exceed 3% in the year 2002, and continued rising until it reached 12%, in the year 2011. The report addressed the issue of guarantees. Taking into consideration, that customers are often from vulnerable groups where microfinance policies tend to facilitate these guarantees by accepting personal guarantees and community-based and collaborative guarantees in many transactions.

The Cabinet approved the recommendations forwarded by the Central Bank of Sudan, which include facilitating the guarantees and considering the salary, the retirement pension and the personal guarantee as guarantees for the financing as well as granting preferential advantages to microfinance projects besides allocating compounds and markets places for the products of microfinance projects together with the establishing specialized centers for the development of small projects.

The Cabinet also decided to establish the Supreme Council for the care of the microfinance industry that should develop policies and follow-up their enforcement in order to achieve the desired objectives of this program to increase the national income, increase employment rate and combat poverty.

The current fiscal year plan includes funding of 100 thousand farmers through loan amounting to 45 million SDGs (Sudanese Pound) for the cultivation of more than 630 thousand Feddns, unit area. The plan also includes a project for the indigenization of small-scale industries to encourage these industries to replace a large proportion of imports.

Dr. Abdur-Rahman Al Khadhir, Khartoum State Governor, shared the experience of the Khartoum State in the field of microfinance, which indicated considerable success of that experience in terms of reflecting the recovery rates, which have raised, reaching 96% of the volume of the loans, which amounted to 29 million SDGs this year.

The Cabinet also listened to the experiences applied in the Youth Organization for Microfinance and North Darfur State. The Minister of Finance explained that the funding available for micro-finance has reached about 3 billion SDGs. He appealed to the States' governors to create organs and mechanisms that regulate micro-finance to benefit from this substantial funding available for targeted groups.

 

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