South Sudan’s financial sector is in its very early stages of development and access to finance is limited
Players in the sector
There are sixteen commercial banks which include Liberty Commercial Bank (LCB) , Buffalo Commercial Bank, South Sudan Commercial Bank, International Commercial Bank (ICB) , Kenya Commercial Bank (KCB), Commercial Bank of Ethiopia, Equity Bank , Cooperative Bank of South Sudan, First Bank South Sudan, Nile Commercial Bank, Ivory Bank, Mountain Trade and Development Bank (MTDB), Cfc Stanbic Bank Limited, Sudan Microfinance Institution (SUMI) , 7 insurance business companies which include Jamus International Insurance, National Insurance Corporation Ltd (NICL), New Sudan Insurance Company Limited, Renaissance Insurance Company South Sudan Ltd, Savannah Insurance Company, Speed Insurance (SS) Limited, UAP Insurance Sudan Ltd and Central Bank of the Republic of South Sudan
Characteristics of the sector
- There are sixteen commercial banks regulated by the Central Bank that are licensed and rendering banking services in South Sudan as of 14 September 2012. Six of them are foreign, three are jointly owned by nationals and foreigners, seven are national banks owned by the local people and 22 more are in the process of registration and licensing.
- Limited regulatory power, weak investor protection legislation and the lack of credit bureau and collateral registry significantly limiting access to credit.
- Access to banking services remains very limited and only about 1 percent of the total population hold a bank account.
- The sector is characterized by high interest spreads while most of the lending activity is concentrated in short-term lending, usually between 3 to 6 months, with only about 10 percent of all loans attributed to small and medium enterprises as most banks prefer lending to well known and well established customers.
- The Microfinance sector, while expanding, remains limited with 6 microfinance institutions operated 76 branches across Southern Sudan by 2010 microfinance institutions reached only about 5 percent of potential clients in the capital (Juba), and less than 1 percent of the potential clientele in the entire region.
- Banking services are mostly limited to foreign exchange, bank transfers and remittance services. Only a handful of banks provide loans, trade finance and savings accounts.
- There are seven insurance companies in South Sudan. Some investment banks, foreign exchange bureaux, finance companies and leasing companies also operate in the country.
Central Bank
Central Bank of the Republic of South Sudan is the central bank which regulates the financial sector.
Insurance companies
The insurance sector is small with private as well as partially government‐owned companies. There are seven insurance companies in South Sudan which include Jamus International Insurance, National Insurance Corporation Ltd (NICL), New Sudan Insurance Company Limited, Renaissance Insurance Company South Sudan Ltd, Savannah Insurance Company, Speed Insurance (SS) Limited, UAP Insurance Sudan Ltd and Central Bank of the Republic of South Sudan .
Capital markets
The country has not yet established a stock market to mobiles savings for investment.
Microfinance institutions (MFIs)
Several microfinance institutions (MFIs) operate in Southern Sudan, as well as a number of small cooperatives/ rotating savings and credit associations (ROSCA’s). The three main MFIs consist of BRAC SS (a subsidiary of the Bangladeshi INGO), SUMI (the result of Greenfield investment by USAID), and FSL (funded by ARC International and Micro Africa Limited).
Challenges facing financial Sector
- The strengthening the central bank supervisory role of Central Bank of the Republic of South Sudan
- Lack of experienced local people to manage the sector
- Lack of facilities offering capacity building
- Reform of the sector in order to effectively serve the community
Investment opportunities
- Development of capital markets and securities exchange potential
- Micro finance opportunities
- Establishing more micro-financing saving institutions which can greatly expand in rural areas.
- Technological innovations
- More development banks
- Investment banking services
- Capacity building institutions
- Housing and agriculture banks
- Promoting new or innovative financial products like mortgage financing, venture capital, merchant banking and leasing finance.
- More players in all sub-sectors