Microfinance in South Sudan: small loans for traders and households
Microcredit in South Sudan is provided by a small number of microfinance institutions, NGO programmes and village savings groups, mostly through small group loans that borrowers repay weekly or monthly in South Sudanese pounds.
South Sudanese microfinance still in its infancy
According to available regional data, the country had around twelve microfinance institutions in 2016, a mix of NGOs and non-bank companies. Their reach remains concentrated in Juba and a few secondary towns, far from the most isolated rural areas.
The microfinance facility launched in 2007
In late 2007, the Bank of Southern Sudan launched a microfinance development facility funded by the multi-donor trust fund managed by the World Bank. It aimed to finance institutions and support young people, women and former combatants.
Supervision by the Bank of South Sudan
Microfinance institutions that take deposits or lend on a commercial basis fall under the Bank of South Sudan. Checking that a lender appears among the regulated institutions published by the central bank remains the first precaution for any borrower.
Joint liability among Juba neighbours
The most common model brings together a small group of neighbours or women traders who guarantee one another. If one member fails to pay, the others cover the instalment; this social pressure replaces the lease or assigned salary that banks demand.
Tea sellers, tailors and repairers
Tea sellers, vegetable vendors, tailors, motorbike repairers and small poultry farmers make up most of the clientele. The loans fund stock, a sewing machine or small tools, and rarely any heavy investment in equipment or premises.
Village savings groups and displaced people
In rural areas, NGOs support village savings and loan groups whose members contribute every week and lend to one another. This system, close to a peer-to-peer loan, also helps displaced people near Bentiu or Malakal.
Weekly instalments against SSP inflation
Frequent instalments, often weekly, limit the loss of value caused by inflation for the institution. For the borrower, they require stock to turn over quickly, which suits retail trade but fits poorly with seasonal farming activities.
Microfinance and sorghum growing
Sorghum, maize and groundnut growers depend on annual harvests. Institutions sometimes adapt the schedule, but most rural financing is covered on our page about the farmer loan in South Sudan and its specific constraints.
Repaying microcredit through MTN MoMo or Digitel
With the expansion of MTN MoMo and Digitel encouraged by the central bank, some institutions are considering disbursements and repayments by phone. This cuts trips to the branch, provided the network actually covers the market or village concerned.
Rates and total cost of microcredit in SSP
Microfinance institutions often charge higher rates than banks to cover their high monitoring costs. Before committing, ask for the total cost in pounds, including membership fees and compulsory savings, so that you know what you will repay.
From microfinance to a bank loan
A borrower who has repaid several cycles can aim for a bank loan for entrepreneurs. The institution's statements then serve as proof of reliability in a country where a credit history is hard to establish.
Rwanda's savings cooperatives as an example
Microcredit in Rwanda, built on widespread savings cooperatives, shows what the sector could become. In South Sudan, insecurity and population displacement are still holding back the expansion of branch networks across the country.
Getting a first microloan in South Sudan
- Find a microfinance institution or savings group active in your neighbourhood or county.
- Attend the information sessions and join a joint-liability group made up of people you trust.
- Build up the required savings or contributions during the observation period.
- Present your business and financing need to the loan officer.
- Receive the loan and repay on the agreed weekly or monthly schedule.
- Ask for a statement at the end of the cycle to qualify for a larger amount.
What a microloan costs in South Sudan
| Item | Variables | Detail |
|---|---|---|
| Interest | Institution, amount and term | Often higher than at a bank |
| Membership fee | Rules of the institution or group | Usually paid only once |
| Compulsory savings | Required percentage of the loan | Locked for the whole cycle |
| Credit insurance | Amount borrowed | Not systematic |
| Travel costs | Distance to the branch | Lower if mobile money is accepted |
Documents South Sudanese MFIs ask for
- National ID card or a locally issued identity certificate
- Passport photographs
- Letter of recommendation from the area chief or the group
- Description of the business activity
- Joint-liability commitment signed by the group
Mistakes that sink a microloan in Juba
- Joining a group with unreliable people: a single default forces every member to pay in their place.
- Using the loan meant for stock on family expenses, then being unable to meet the weekly instalment.
- Paying fees to a fake agent who promises an NGO microloan in exchange for a paid registration.
- Borrowing from two institutions at once to repay one with the other, which quickly leads to over-indebtedness.
Lenders to contact
- Equity Bank South Sudan: South Sudanese arm of Equity Group, a commercial bank offering loans including SME financing products, with offers aimed at the diaspora.
- KCB Bank South Sudan: South Sudanese subsidiary of Kenya's KCB Group, a commercial bank serving individuals and businesses, including a dedicated business club for entrepreneurs.
Microfinance in South Sudan: common questions
Do you need collateral for a microloan in South Sudan?
Most often the guarantee is the group's joint liability, backed by compulsory savings. Some institutions also accept an individual guarantor or a small asset, but no land document is generally required for first loans.
Can displaced people access microcredit?
NGOs support savings groups in camps and sites for displaced people. Getting a loan from an institution is harder without a stable address, but a community recommendation and regular savings can help.
How much is a first microloan in SSP?
First loans are generally modest and grow with each cycle repaid without delay. The exact amount depends on the institution, the activity and inflation, so ask about it during the information session.
How can you tell whether a Juba microfinance lender is licensed by the BoSS?
The Bank of South Sudan publishes the list of regulated institutions on its website. You can also ask to see the licence displayed in the branch and should be wary of any outfit collecting fees without an identifiable office.