Financing a farm or livestock business in Sudan
In Sudan, farmers are financed mainly through salam, the advance purchase of a harvest, and murabaha on inputs, from the Agricultural Bank of Sudan and other Islamic banks, in a country where farming and livestock account for over 40% of jobs.
Salam, an advance on the harvest
Under salam, the bank pays today for a quantity of sorghum, sesame or cotton that will be delivered to it after the harvest. The farmer gets cash to sow the crop, and the price is fixed when the contract is signed.
The Agricultural Bank of Sudan
A specialised public bank, the Agricultural Bank of Sudan finances inputs, tractors, pumps and farming seasons through its network of rural branches. It is particularly active in the rain-fed areas of Gedaref and Sennar as well as in irrigated schemes.
The Gezira Scheme and irrigation
Located between the Blue Nile and the White Nile around Wad Madani, the Gezira Scheme is one of the largest irrigated areas in Africa. Fighting in Al-Gezira state has disrupted farming seasons and the repayment of financing.
Sesame, sorghum and gum arabic
Sudan ranks among the world's leading exporters of gum arabic and sesame. Banks readily finance these value chains, whose products are tradable and exportable through Port Sudan, which makes repayment in foreign currency or SDG easier.
Financing livestock and cattle exports
Raising camels, sheep and cattle is a major source of wealth. The Animal Resources Bank finances fattening, vaccines and exports to the Gulf; nomadic herders, however, struggle to obtain credit because they lack fixed collateral.
Murabaha on inputs and equipment
Seeds, fertiliser, diesel and tractors are financed through murabaha: the bank buys from the supplier and resells to the farmer with a markup. For small amounts, Sudanese microfinance also covers pumps and hand tools.
Musharaka and sharing harvest risk
Some banks finance a season through musharaka: they provide part of the inputs and share the harvest or its sale price. In a bad season, the loss is split according to each party's contribution, which limits the farmer's debt.
Drought, locusts and crop insurance
Irregular rainfall in Kordofan and Darfur leaves harvests exposed. Agricultural takaful products exist, but their coverage remains limited; the bank may require a guarantor or ask the farmer to diversify crops across several fields.
Customary land and collateral
Much farmland is held under customary rights or state leases and is rarely registered individually. The bank then accepts the harvest as a pledge, a guarantee from a farmers' association or a pledge on equipment.
Producer associations in Gezira and Gedaref
Producer associations in Gezira and Gedaref negotiate inputs and financing collectively. Their collective weight reassures banks, which prefer a single counterpart. For a picture of all the banking players, see the overview of Sudanese credit.
How the war has affected the farming season
The conflict has caused displacement, looting of stocks and higher diesel prices. Branches in affected areas have restricted financing; seasons are now concentrated more in eastern and northern states such as Kassala, Gedaref and River Nile.
Farm finance in neighbouring countries
In Uganda or Tanzania, agricultural credit relies on conventional interest rates. Farm financing in South Sudan, meanwhile, remains heavily dependent on humanitarian programmes, cooperatives and seeds that NGOs hand out to farmers in the country.
Financing a farming season in Sudan
- Choose the crop and estimate precisely the area, the inputs needed and the expected yield.
- Approach the Agricultural Bank of Sudan or a bank that is active in your state.
- Prepare proof of your right to farm the land: a lease, a customary certificate or an irrigated scheme certificate.
- Pick the right contract: salam for the harvest, murabaha for inputs, musharaka to share the risk.
- Put up collateral: the harvest, equipment, a guarantor or the producer association's guarantee.
- Deliver the harvest or repay on the agreed date after the sale.
Cost of agricultural financing in Sudan
| Item | What it covers | What makes it vary |
|---|---|---|
| Salam price | Price fixed in advance for the harvest | Crop, expected price, season |
| Markup on inputs | Bank's profit under murabaha | Term and amount |
| Agricultural takaful | Cover for crops or livestock | Region and type of risk |
| Transport and storage | Moving goods to markets and the port | Distance and road security |
| Diesel and irrigation | Pumping and mechanisation | Fuel availability |
Documents for a farm financing file in Sudan
- ID card with national number
- Lease or certificate of land rights
- Irrigated scheme registration certificate where relevant
- Production estimate and season budget
- Pro forma invoices for inputs or equipment
- Certificate from the producer association
Common mistakes by Sudanese farmers
- Selling for cash a harvest already promised to the bank under salam, which is a serious breach of contract.
- Underestimating the cost of diesel for irrigation and transport, which has risen sharply since the war began.
- Borrowing for a single crop in a drought-prone area with no reserve and no diversification.
- Paying fees to a fake intermediary promising tractors subsidised by an international programme.
Lenders to contact
- Bank of Khartoum: Sudanese commercial bank offering Sharia-compliant financing, notably murabaha, for individual customers and businesses seeking transparent financing.
- Faisal Islamic Bank (Sudan): Pioneering Sudanese Islamic bank providing Sharia-compliant banking services and financing to individual customers and businesses across Sudan.
Agricultural credit in Sudan: your questions
Is salam risky for the farmer?
Since the price is fixed in advance, the farmer does not benefit if market prices rise at harvest time. In return, he receives funds to sow. A poor harvest still obliges him to deliver the promised quantity, often by buying on the market.
Do you need a property title to get farm financing?
Not always. Banks accept a farming lease, registration in an irrigated scheme or collective guarantees. A registered title does, however, make it easier to access larger amounts and longer terms.
Can livestock herders get financing?
Yes, notably from the Animal Resources Bank or through murabaha on feed and vaccines. Nomadic herders often have to go through an association or a settled guarantor, since they lack a fixed address and land collateral.
Has financing resumed in the Gezira Scheme?
The situation varies across the scheme's sections and with the security situation in Al-Gezira state. Farmers should check with the scheme administration and their bank before each farming season.