Kevin Ogutu
Africa-Press – South-Sudan. South Sudan’s civil war that started in December 2013 had a devastating effect in the country, causing two million refugees to flee across its borders and displacing another two million inside the country.
In September 2018, the government and opposition signed an agreement to revitalize the unimplemented 2015 peace accord, yet sustained peace for many South Sudanese remains elusive.
Amid this devastating humanitarian emergency, South Sudan’s economy has tumbled. Though the country is rich in arable land, gold, and other minerals, the oil fields in northern South Sudan dominate the economy.
South Sudan, being the most oil-dependent country in the world, has contributed uniquely to the banking system here, what it means to succeed or fail as an investor in the sector.
Ryan O’Grady, the Acting CEO of Kush Bank, which is one of the locally owned banks says South Sudan has a great potential given depositors with commercial banks (per 1,000 adults) was reported at 81.47 in 2020, according to the World Bank collection of development indicators, compiled from officially recognized sources.
This comes to a paltry 8.2 per cent of adult population having bank accounts with the commercial banks. This in essence means that there is a huge chunk of adults who are yet to open accounts with the various commercial banks.
“We are present in six out of ten states. This has meant working in rather strained environments. But the goal is to develop the nation by growing the economies. This has no doubt come at a huge cost but with the right strategies we have managed to stay afloat,” he says.
Kush Bank started operations in 2013, 7 years after another locally-owned bank – Ivory Bank – set foot in the country, going head to head with KCB Bank which was yet another pioneer bank that would start in 2006 because of the peace CPA guaranteed.
According to Ryan, there should be a deliberate effort by the banking institutions to tap into the farming communities. Kush Bank for instance has introduced flexible terms to farmers in the agriculturally-rich regions, such that they can be given the financial support, and a flexible repayment grace period of say six months which means they shall have and sold their produce before the lender comes knocking.
“We are working closely with other partners like the Food and Agriculture Organization (FAO), World Food Program (WFP) to ensure that once the farmer is done with the production cycle, there should be a ready market. But we are looking beyond that. In the future we should introduce value addition chain,” says Ryan.
With value addition, there will be other aspects like job creation, infrastructural development where the raw materials are produced, and need for banking and insurance facilities. However, all these are dependent on security.
Unique demographics
Ryan is looking at two unique demographics that is the youth and women. In the recent past he says Kush Bank for instance has made deliberate effort to come up with tailor-made products for these groups. He says banks must think of making available credit services that can help youth and women-led companies be up and running.
“Banks must be more responsive to the needs of the people. When we talk about credit and liquidity, we must first be in a position to unlock the existing bottlenecks. The guiding principal must be trust. Our clients must always get their money whenever they ask for it because we are merely offering safe storage for their hard-earned cash,” says Ryan.
With Access to over 5000 banks globally, Ryan says they are in advanced stages of making it possible for businesses that do not have the capital on the ready to get Local Purchase Order (LPO) financing. This will be particularly key for the youth and women led organizations with interest in oil and power, yet their bank statements alone may not guarantee conventional loans that more established businesses may benefit from.
Digital lending
He says the banking sector is equally keenly following the developments around digital lending. Despite the small fraction of adults in the commercial banks as depositors, the mobile money has some promises that they are keenly following.
“With the introduction of MTN’s MOMO mobile money platform, we are in talks with the MTN management. We do not wish to miss out on any opportunity that will guarantee convenience and secure money transfer,” he says.
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