The role of microfinance institutions in supporting women microenterprises in urban Sudan

In this context, there is a need to assess the role of MFIs to the sustainable growth of women microenterprises, the promotion of entrepreneurship activities and reducing poverty in Sudan. These are therefore the objectives of this research, which in addition tries to investigate the level to which MFIs meet the financial needs of microenterprisesand to identify the MFIs’ challenges in serving microenterprises, taking the Khartoum State as a case. The study’s focus is on women with microenterprises or engaged in trading, production, and selling in the informal sector. Hence, the population of the study is the 104 thousand of the self-employed females in KS.350 respondents are selected and random sampling technique is applied considering location of project (market-based, home-based, and street sellers), locality (all KS localities, namely Omdorman, Karrari, Ombada, Khartoum, Jabalawlia, Bahri, Shargalneel) and type of activity (20 different activities are covered). Primary data are collected using a structured questionnaire and individual interviews held with female entrepreneurs in KS as well as by optical observation by visiting the respondents in their locations. Also to assess the performance of MFIs in Sudan,several MFIs are selected including the following: • Saving and Social Development Bank (SSDB) and Farmer Commercial Bank (FCB) as examples of banks providing microfinance; and • Youth Foundation for microfinance and the experience of “Amel” microfinance program, as examples of financial institution providing microfinance; Interviews were conducted with officials in these institutions and additional information was also obtainedfrom their reports.Secondary data are gathered from various sources including national surveys, censuses and previous studies. Both primary and secondary data are analysed using descriptive statistics and cross tabulation imbedded in Microsoft Excel. Major findings of the study show thatThe Central Bank of Sudan adopted the strategy of the microfinance and it opened an important path of social insurance, but the rate of the inflow of finance was less than the proposed rate of 12% of the inflow of finance, which was specified by the bank. It is also revealed thatthe reluctance of commercial banks to microfinance is due to the risks associated with microfinance and low returns. The findings of the survey reported that the lack of funds to finance investment or ongoing business operations is one of the main problems facing female entrepreneurs in Khartoum state. Results show that 63% of the women micro-entrepreneurs indicated that they didn’t take loans from banks or other financial institutions, while only 37% indicated that they took loans from banks or financial institutions. Nonetheless, all interviewees underlined their need for finance as a major constraint. Thosewho sought financial services from banks however are found to be satisfied and the majority confirmed that the funding helped them to succeed.Banks and funding institutions as well confirmed that, female entrepreneurs have succeeded in paying back their loans in due times with a repayment ratio of 74%among female entrepreneurs, which is considered high.