Sudan central bank raises microfinance ceilings, bans accounts of 157 exporters

July 29, 2024 (PORT SUDAN) – Sudan’s central bank raised microfinance lending limits on Monday and banned 157 companies from banking activities for failing to repatriate export earnings, the state news agency SUNA reported.

Exporters in Sudan often circumvent the formal banking system, sending proceeds from sales abroad to the black market instead. This practice starves the country’s foreign currency and fuels the depreciation of the Sudanese pound.

The central bank lifted the limit on microfinance loans to 4 million Sudanese pounds ($6,844) from 1.5 million pounds for productive sectors, and to 2 million pounds from 750,000 pounds for services, trade, and household sectors. The move aims to boost financial inclusion and support small businesses.

However, the bank also cracked down on exporters who have flouted regulations. It barred 157 companies from using the banking system, the second such measure this year following a similar ban in March against over 200 firms. In May, it lifted restrictions on 163 companies that had complied with regulations.

The central bank is grappling with a severe economic crisis marked by soaring inflation, dwindling foreign reserves, and a rapidly depreciating currency. It recently launched a $1 billion financing facility to stabilize the pound and support essential imports.