MICROCAPITAL STORY: Bank of Southern Sudan Launches Facility to Encourage Microfinance with Support from International Donors led by the World Bank

The Bank of Southern Sudan (BoSS) has launched an initiative to encourage more microfinance institutions (MFIs) in Southern Sudan. Called the ‘Microfinance Development Facility’, it will award a total of USD 1 million to successful MFI applicants in the first quarter of 2008.

The facility is supported by the World Bank administered Multi-Donor Trust Fund (MDTF) within the framework of the Private Sector Development Project (PSD).

To be successful, applicants must demonstrate good governance, well-defined strategy, good business plans and the ability to build the capacity of their microfinance clients.

The BoSS, which is the bank of the Government of Southern Sudan, was established in July 2006. It is linked to the Sudanese Central Bank via its President Elijah Malok, and it aims to facilitate financial transactions and boost economic growth across southern Sudan.

Multi-Donor Trust Funds (MDTFs) are designed to help channel donor resources in a coordinated way and in accordance with national priorities and are often used in post-crisis situations. They co-ordinate donor programmes rather than having individual agencies raise and spend their own funds on their own agendas. Other MDTFs are in existence in Iraq, Somalia and the Lebanon.

The Sudanese MDTFs are funded by donor countries and managed by two technical secretariats, one for the MDTF-National, which focuses on war-affected areas of Northern states (based in Khartoum), and a second MDTF-Southern Sudan (based in Juba).

In April 2005, donors pledged over USD 500 million for the two MDTFs. The donors include The Netherlands, Norway, United Kingdom, European Commission, Sweden, Germany, Denmark, Finland, Italy, Iceland, Greece, Canada, Saudi Arabia and the World Bank.

The MDTFs are administered by the World Bank, working together with UN partners, donors, civil society, and the respective governments.

The MDTF-Southern Sudan funds 11 other projects in addition to the Microfinance Facility, covering all types of government reconstruction, from law to sanitation.

The World Bank Privates Sector Development (PSD) program in Sudan has a primary focus to improve the country’s investment climate. It consults with the private sector and suggests reform to encourage further activity, with particular reference to business entry, land acquisition, custom administration, and tax and tax administration.

Amy Rennison, MicroCapital writer

Additional Sources:
Symbiotics:
http://www.symbiotics.ch/en/latest_news.asp?id=b750

Sudan Tribune:
http://www.sudantribune.com/spip.php?article25121

IRIN:
http://www.irinnews.org/report.aspx?reportid=59734

The World Bank Privates Sector Development (PSD) program in Sudan
www.publicprivatedialogue.org/workshop%202007/Summary%20Sudan.doc

Multi-Donor Trust Funds – UNDP
http://www.undp.org/partners/mdtf/#

World Bank – MDTFs Sudan
http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/SUDANEXTN/EXTAFRMDTF/0,,contentMDK:20850932~menuPK:2317436~pagePK:64168445~piPK:64168309~theSitePK:2193668,00.html