Microfinance brings citizens into the financial mainstream. It is one innovative mechanism to address effectively material poverty, the physical deprivation of goods, services, and the income to attain them.
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When used with skill, the material benefits of microfinancing can extend beyond the household into the community. At the personal level, microfinance can also effectively address issues associated with “non-material” poverty, which includes social and psychological effects that prevent people from achieving their potential.
Banking entities in Sudan, led by the Central Bank of Sudan, offer microfinance options in order to develop communities that need to make urgent headway with social issues. There are currently no specific financing mechanisms for SMEs in Sudan, and yet many microfinance initiatives have been adopted. Sudan’s funding policy as issued by the Central Bank of Sudan includes explicit directives for commercial and specialised banks to direct 12% of their finance ceiling to finance the activities of vulnerable social groups.
The Sudanese French Bank is one bank known for its concerted efforts to reduce poverty in support of the wider national effort. The bank is working to provide opportunities for small business owners and individuals who are capable of earning and production, regardless of their gender, as well as craftsmen and professionals, farmers, pastoralists and low-wage earners. The bank will even talk to those who are already retired about options; an entrepreneurial spirit and previous experience in the field of small businesses is all that is required for these individuals.
Microfinancing reaches those who live both inside and outside of Khartoum. Women are an integral part of the Sudanese French Bank’s policy because historically they lacked access to financial services. In addition, women are targeted as potential microfinance customers because they are considered more committed customers, who take advantage of the financing terms of interest for the benefit of the members of their families. Moreover, as a key group of labourers in the community, access to financial services is crucial for women; figures released by the bank indicate that they currently represent approximately 350 out of 1,150 microfinance customers, or some 30%. This percentage is set to increase substantially.
Woman are targeted as potential microfinance customers because they are considered more committed customers, who take advantage of the financing terms of interest for the benefit of the members of their families
So dedicated is the SFB to the topic of financing help for women that it held a forum for businesswomen in December 2013, at which several scientific papers on project management were presented. All of these papers talked about empowering women and how progress on this could be monitored, with special emphasis on those who had recently been engaged in economic activities and were reasonably solvent. Accompanying exhibitions to the forum showed women involved in diverse activities and with some of their products also displayed.
Women represent approximately 350 out of 1,150 microfinance customers, or some 30%. This percentage is set to increase
Using microfinance as their vehicle, women are often empowered to speak out more, to assume leadership roles, and to address issues that extend beyond their entrepreneurial activities. For many women, a microfinancing group serves as the first opportunity to meet formally with other women to discuss their problems and develop joint action. The groups serve as a channel of information. For example, members may tell each other about counseling services that have been established for drug and alcohol addicts. Many women participants experience a change in their household and community status. Some experience an increase in financial responsibilities when their husbands notice that they are involved in lucrative activities. Talking on microfinance initiatives in Africa as a whole, a document released by the United Nations says: “Outside assistance must employ bottom-up, participatory approaches that ensure that microfinance schemes are built around people rather than people around them. Participatory approaches are not only more culturally appropriate and hence sustainable for local needs, they foster more equitable distribution of benefits as development is accountable to a more representative community.”
National policy makers have the ability to make microfinance a formidable economic sector in itself, particularly in countries where low income needs addressing and where the majority of people reside in rural areas. What is more, research shows that microfinance initiatives are more likely to succeed in a supportive national, regional and international environment.