Microfinance Country Study of South Sudan

A spotlight on microfinance in a post-conflict environment

The environment for microfinance in South Sudan is very challenging with high operating expenses. In particular, the post-conflict environment has contributed to huge needs in terms of capacity building (MFI Boards, management and staff), education and awareness raising for clients, weak infrastructure, and weak legal environment for lending. Funding also presents a challenge to the sector which has huge needs in terms of technical assistance (TA) and training as well as loan funds if peace returns and normal growth strategies resume.

The situation was exacerbated by the conflict which started in December 2013 and was still ongoing in 2015 in parts of the country and directly affecting MFIs. The current security situation is thus very poor and the economy is suffering notably with respect to a deteriorating exchange rate (SSP/USD) and general economic slowdown.

There is a functioning microfinance association (MASS), although further support is needed for it to fulfil its potential. MASS is run by the CEOs of two of the leading MFIs but it lacks a secretariat and adequate funding. Also, a credit reference bureau (Creditinfo) is in place within the Bank of South Sudan (BSS) and functional since January 2015, but not yet accessible by MFIs.