Access to credit enables people to acquire goods and services exceeding their disposable income. Credit access in Sudan, a lower middle-income country in northeastern Africa, is limited. In 2013, Sudan ranked 167th out of 185 countries based on the ease of getting credit by the World Bank’s Doing Business Report. Limited access to and the lack of affordable credit are largely responsible for small business failures in Sudan.
In Sudan, financial services are concentrated in urban areas; however, efforts have been made to improve access to these services. One example is the Multi Donor Trust Fund-National (MDTF-N) Sudan Microfinance Development Facility Project—a project encouraging the development of affordable financial services, including credit and saving programs. The project serves poor entrepreneurs in the marginalized and war-affected parts of Sudan and has distributed loans to over 380,000 Sudanese households.
Though 480,000 people have credit access in Sudan at market rates, the formal financial sector remains inaccessible to vast sections of the population, including women. Women’s credit access in Sudan is restricted by cultural practices, including the roles of men as provider and head of families and gender-biased inheritance rules favoring men. There are female-headed households; however, they tend to have lower household income than male-headed households due to the side effects of gender discrimination — one being women’s low average education level.
The government’s Central Bank of Sudan identified microfinance — financial services distributing small loans to low-income individuals — as a poverty reduction strategy. To meet their poverty reduction goals, the Central Bank of Sudan has directed significant resources toward increasing the share of loans and credit to small- and medium-sized businesses.
Still, there is more to be done. One suggestion made by the Food and Agricultural Organization of the United Nations is for Sudan to develop gender policies dedicated to increasing availability and access to credit for female household heads. Without prior attention to gender discrimination and income inequality, the prospects for poverty reduction efforts in Sudan are uncertain.
– Gabrielle Doran