Scarcity of skilled labour
Commercial banks and MFI’s have difficulties in finding staff with good financial sector skills in South Sudan.
Market demolitions
The recent and reoccurring destructions of informal markets by the local government entities in Juba have caused severe losses to the financial institutions as a number of their clients were based in the demolished markets.
Limited access to funds
The financial institutions lending has been limited by low levels of liquidity and this could lead to over lending in the sector.
Lack of a regulatory framework
The Financial institutions are issued a license to operate but there is limited guidance in the form of circulars ordaining regulations from the Central Bank. This delay in setting up a relevant regulatory framework is some way limiting the ability of the sector to take client deposits.
Inadequate technical support
The financial institutions operating in Juba suffer from a low access to best practices such as the ability to develop new products, train their staff, and monitor their operations adequately.
Limited diversification across sector
Due to the low availability of training and sector specific skills transfer in South Sudan, lending is concentrated in the services and trade sectors. The sector is in position to expand, diversify their businesses into other productive activities and service a greater client base if the sector was supported by government to develop the scarce skills.
Lack of security and transport facilities in non-urban areas
Businesses expansion in some areas is limited due to the lack of security and the lack of transport infrastructure. The provision of these would enlarge the financial sector client base in rural areas.
High cost of operation in South Sudan
The comparatively higher cost structure in South Sudan compared to other countries in the region curbs the speed at which the financial sector can reach sustainability with comparatively similar interest rate and fees. Certain states in particular have high costs of operation and establishment given low infrastructure levels relative to the market size.