Abstract

This chapter gives a presentation of a brief overview or background to the study, statement of the problem, and purpose of the study, study objectives, research questions, scope and significance of this study. 1.1 Background to the study With growing levels of poverty and unemployment at their highest, many people in South Sudan; young and old, men and women, are venturing into business so as to make ends meet. The economy of south Sudan, which is almost entirely dependent on oil revenue (Shankleman, 2011), is highly vulnerable to external shocks that come as a result of fluctuations on the world market. In view of this, various lending institutions have come up with products to finance entrepreneurs. With all these developments, starting up a business has always been a mountain to climb for prospective entrepreneurs, many of whom have resorted to using their savings or borrowing from relatives and friends. Tony Killick (1981) notes that, “Often the informal sector is said to be discriminated against in the capital market and is unable to obtain funds, no matter what the interest rate. It is quite evident that lack of initial capital imposes a severe constraint in starting up their businesses. Microfinance has huge development potential in Southern Sudan where the majority of the population lives below poverty threshold and have no access to the conventional banking system. Given the large unemployed population and the sparsely available jobs it can provide much needed initial finance to jump start small enterprises for enhanced livelihood opportunities and support to the growing private sector (Shahidur, 1999). Current programs have generated much enthusiasm and excitement at all levels of government in the very charged political environment that precedes one year of independence. However, despite the support from a number of support organizations and the presence of a number of microfinance institutions in Southern Sudan since 2005, the development of the industry has been slow and constrained.