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Abstract:
The Government of Sudan is committed to supporting the expansion of sustainable microfinance through a process managed by the Central Bank of Sudan (CBOS). Because microfinance is new to the country, however, very few specialized microfinance institutions (MFIs) operating , and the Government has thus focused on channeling funds for microfinance through commercial banks. but banks are reluctant to expand services, towards meeting the 12 percent of investable funds target for MF lending set by the CBOS. It was one percent in 2007 and about five percent at end-2012 but Banks optionally steady progress hold up to 20 percent (25 percent until end-2012) of their financing portfolio in Government Musharaka Certificates (GMCs), Government Investment Certificates (GICs), CBOS Ijarah Certificates (CICs), despite the call from the Central Bank for all banks to allocate 12% of their portfolio for microfinance as stimulus policy backed by incentives. This paper is an attempt to analyze why the sudanse banks do not strictly apply the central bank of Sudan directive of allocating 12 percent of their loan portfolio to microfinance *excessive government interference* The banks have made move to broaden of their financing portfolio in Government Musharaka Certificates (GMCs), Government Investment Certificates (GICs), CBOS Ijarah Certificates (CICs),
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