On the suitability of group lending model in South Sudan’s small and medium enterprises sector

2017-12-19 09:27:42 Viewed: 362 Downloads: 87
  • On the suitability of group lending model in South Sudan’s small and medium enterprises sector

      Andile Dube and Angelo Dube

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    Pub: 2017-12-19 09:27:42

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  • Post-conflict societies, such as South Sudan are characterised by weak
    regulatory frameworks and lack of political will to implement much needed
    reforms. This often impacts directly on the economy. The legal, social and
    financial environment is also weakened in the process, leading to the demise of
    key economic drivers. The small and medium enterprise (SME) sector is critical
    for the growth of nascent economies such as South Sudan’s. The effectiveness
    of SMEs as key economic drivers is amongst other things dependent on their
    access to credit. With only a few SME-specific credit facilities in South Sudan
    at the moment, it is important that these institutions adopt funding models that
    will suit the poor, most of whom do not have collateral and credit history. Group
    lending appears as a suitable model for the poor. The success of this mode of
    SME funding in selected jurisdictions, namely Angola, Bangladesh, Bolivia,
    Burundi, and Colombia underscores such a position. The socio-economic, legal
    and political environment of the three jurisdictions studied in this paper where
    group lending has been successful closely mirror that of South Sudan. The
    dynamics of group lending will, therefore, likely suit the needs of South Sudan.
    Hence it is suggested as one solution to uplifting the small business sector of
    Africa’s newest country, although attention must also be given to other critical
    development factors such as a sound regulatory regime, an effective taxation
    system and access to credit

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  • Keywords

    South Sudan, SMEs, Group lending model, Post-conflict, Economic growth


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