Microfinance in Sudan and Ethiopia
By Professor Badr El Din A. Ibrahim
The purpose of this paper is to review and compare the distinct features and practices of Sudanese and Ethiopian microfinance sector. Analysis includes general characteristics of both sectors such as institutional structures/ characteristics, policies, programs, regulation, strategies, wholesale markets, technical assistance etc. Moreover, the major characteristics of microfinance institution (MFIs) in both countries are compared, and a review and comparison of some performance criteria of MFIs is made. The methodology consists of analyzing and examining issues at hand using some indicators and qualitative information. The paper come up with some recommendations regarding the constraints facing microfinance (MF) sectors in the two countries, and also suggests how the two microfinance experiences can learn from each other. The Sudanese MF experience, we argued, can give a lesson from its diversified wholesale market via the government-owned Wholesale Guarantee Agency. The paper also propagates the merits of Islamic microfinance as practiced in Sudan to Ethiopia-Muslim minorities. We argued that this can be carried out via new windows or specialized branches within the existing MFIs; no need for a new legislations or a new MFIs structure. Sudan can learn from the role and functions of AEMFI, to establish the Sudanese Association of Microfinance Institutions. Sudan can also learn from the Ethiopian social management system to self monitor the social impact of microfinance on their clients. The paper is constrained by the limitation of quantitative data, especially financial data, regarding the Sudanese MFIs. This hinders deep comparison of the financial performance of MFIs in the two countries. More research is required in this area.
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