Microfinance Unit CEO Message
Welcome to the CBoS/MFU. This website provides the visitors with a wide range of up-to-date information covering various activities of the microfinance sector in Sudan (circulars, regulations, statistics, news, event, microfinance-related articles etc.). It links the CBoS/MFU with its partners, stakeholders, banks' clientele, researchers and those concerned with microfinance activities.
The worldwide experience of microfinance has concluded that the subsidy-driven microfinance is both limited and not sustainable. It is now well accepted that one of the best providers of large-scale persistent microfinance services is a formal bank (public or private; commercial or specialized), provided that it is market-oriented, not reliant on financial support, with an effective incentive-driven saving component. Although some economically active enterprising poor clientele have promising investment potential, they are more likely to lack requirements of formal banking financing e.g. appropriate guarantee.
The CBoS is trying to set a microfinance workable banking model that will overcome these problems and that can be replicated elsewhere. This will be done through surmounting all gaps in formal microfinance systems in order to address a specific aspect of poverty alleviation – access of the financially needy and poor to formal financial institutions. This experience is trying to prove that sustainable application of shariah-compliant microfinance on a large scale, is not difficult nor impossible. The CBoS/MFU is working with partners in microfinance commercial banks, Sudan Microfinance Development Facility, UNDP, IDB, NGOs, Social Funds, Non-Bank Financial Institutions, Community-Based Organizations, Rural Development Projects, etc.) to expand the outreach of microfinance to the poor in all parts of the country.
The CBoS full-fledged Islamic microfinance experience is considered the first of its kind worldwide. It started during the nineties when the Financing Policies of the Central Bank of Sudan, 1994/95, included “Craftsmen, Professionals, and Small Producers, including the Productive Families” among the priority sectors in bank financing (later on labeled microfinance). Since then the financing policies has had as well specified reference percentages for the contributions of the partners in theMusharaka formula and also the minimum profit margin for Murabaha. They also specified percentages for the financing of this sector that reached 12% of the total portfolio recently (including micro and small finance).
In 2006, the CBoS formulated the Strategy for Expansion and Development of the Microfinance Sector in Sudan in 2007, and established this microfinance unit to improve the position of the banks' financing to this sector. The stragey was the first step undertaken by the CBoS/MFU in creating a solid, self-sustained microfinance sector in Sudan that reaches the marginalized poor in the rural areas. This is, according to the Strategy, it is best done using various channels among which are: diversifying the microfinance products, expansion of outreach, managerial and financial capacity building and financial support, application of the best delivery microfinance services to the poor, improvement of microfinance financial reporting, and upgrading of capabilities of microfinance staff via training services. These mechanisms were and still forming the base of microfinance policies and action by the CBoS/MFU.
We, at CBoS/MFU, will spare no efforts to develop and enhance our website with the aim of fulfilling our visitors' aspirations and expectations. Therefore, we will value your comments and suggestions.
Badr El Din A. Ibrahim
(BSc Hons. Econ.; U of K; MA & PhD Econ, UK)
Microfinance Unit Managing Director