Background

The lack of sustainable access to financial services for low-income people in Sudan has been identified by the government and other major actors as one of the core constraints to poverty alleviation in Sudan.

Following the signing of the 2005 Comprehensive Peace Agreement, microfinance has been endorsed by the Government of National Unity and the Government of Southern Sudan as a central component of their poverty reduction strategies. In 2006, the Central Bank of Sudan formulated a “National Vision for the Development and Expansion of the Microfinance Sector in Sudan”, a two-year strategy on microfinance sector policies and consequently established its Microfinance Unit to lead the development of the sector in Sudan. In parallel, the Bank of Southern Sudan created a Microfinance Unit in 2008 and the Ministry of Social Welfare also set up a Finance and Poverty Reduction Unit. A number of banks in Sothern Sudan also established Microfinance Units.

In November 2007, the Central Bank of Sudan with the support of UNDP as main sponsor, the World Bank, the International Fund for Agricultural Development, the German Development Service (DED) and Zain Telecommunications Company, hosted the first National Consultative Forum on Microfinance in Sudan . The Forum emphasized the need for creating a microfinance industry in Sudan as well as the importance of business-skills capacity-building and promoting self-managed savings groups, especially in rural areas lacking any kind of financial services.

In this context, and as part of UNDPs Poverty Reduction Strategy for Sudan, UNDP funded and launched the Preparatory Support to Microfinance and Micro-Business Development Programming in Sudan project in June 2008.

To help fill this gap, UNDP with the support of its Bureau for Crisis Prevention and Recovery (BCPR) started the Darfur Livelihoods Programme involving a large number of local, national and international partners.

Objectives
Complementary to other actors’ activities, UNDP’s planned areas of intervention being targeted through this project are:
1. Strengthening the national microfinance coordination mechanism in Sudan
2. Preparing a programme to support the expansion of microfinance services across Sudan through mobile phone technology
3. Developing a conflict-sensitive microfinance model for Darfur
4. Supporting the scale-up of selected microfinance programs in Sudan
5. Designing a National Youth Volunteers Scheme for rural Micro-Enterprise Capacity Building
6. Assessing the feasibility of a Training Voucher Market Scheme for urban Micro-Enterprise Capacity Building