South Sudan - Key Findings from the Scoping Report
South Sudan seceded from Sudan to become an independent country in June 2011, and as the country strives to build institutions data availability is very limited. While several banks and mobile network operators are active in the market, financial services policy, regulations and infrastructure governing the banking and payments spaces are at a nascent stage. The Bank of South Sudan is keen to rapidly modernize the payment infrastructure, and is committed to working with professional and development institutions to achieve this goal.
Most of the 10.6 million population of South Sudan live in rural areas as pastoralists and farmers. Bank penetration is negligible, while mobile penetration stands at about 15 percent. Zain and Vivacell command a majority of the cell phone market, but neither of them has launched mobile money services. The banking sector is led by two Kenyan banks, Equity Bank and Kenya Commercial Bank, both of which are keen on partnering with mobile network operators to launch mobile banking services, based on their experiences in Kenya.
In the absence of any banking regulations and guidelines, financial institutions are operating under rules instituted by the Bank of Sudan. Comprehensive banking and payment regulations are currently under parliamentary review for South Sudan. These are expected to cover branchless and mobile banking. In the interim, the Bank of South Sudan is willing to allow the development and adoption of mobile money regulations that do not require parliamentary approval to speed up the development and uptake of mobile financial services
In the absence of a well developed e-payments infrastructure, people have been using airtime to send money to family and friends. The minutes of airtime are cashed out by the receiver at a merchant, at a discount of about 10-20 percent.
An intervention in this market would have to take into account challenges on all levels; the absence of regulations, the absence of developed distribution networks and small traders to act as agents, and the need for customer education and partnerships to deploy the service. On the positive side, the population is already accustomed to using airtime as a proxy for mobile money (despite associated hazards) and many have been exposed to mobile money as a concept in neighboring markets where there is a diaspora community. This relatively high level of customer acceptance should facilitate a more rapid uptake of mobile financial services when they are eventually launched in the market.