Technical Assistance for the Development of a Cooperative Loan

Technical Assistance for the Development of a Cooperative Loan – Initiative under the WE-RISE! Programme

November 2024
As part of the WE-RISE! program’s efforts to promote economic development and financial inclusion in Sudan, the technical assistance provided to Ebdaa Microfinance Bank has resulted in the creation of an innovative Islamic finance product. This product is tailored specifically for cooperatives and associations active in the agricultural sector in Gedaref State. Implemented by the Italian Agency for Development Cooperation (AICS), with the support of Microfinanza srl and AVRIO Impact and IFAAS, this initiative seeks to address the gap between the needs of small and mediumsized agricultural entrepreneurs and the services offered by financial institutions. It places a special emphasis on businesses led predominantly by women and youth, particularly those facing greater social vulnerability.
WHAT HAS BEEN DONE?

Creating and implementing an innovative cooperative loan to help vulnerable microentrepreneurs and cooperative members access fixed assets, grow their savings and income, start new businesses, or expand existing ones.

Building the skills to empower Ebdaa staff to offer innovative cooperative loans aimed at supporting women-led agricultural cooperatives. This will help strengthen their businesses, improve their livelihoods, and enhance the living conditions of their families.

Starting from comprehensive market research, conducted through surveys and focus groups with key stakeholders to identify the needs of cooperatives and agricultural associations, and analyzing Ebdaa Bank’s ability to address these needs, the following steps were carried out:

  • Staff training: Ebdaa Bank’s staff underwent intensive training on Islamic finance principles and the operational management of the new financial product, with a focus on credit assessment and customer service.
  • New Cooperative Asset Financing Product: Based on the research findings, an innovative Islamic loan product was developed to finance cooperative activities, supporting the acquisition of agricultural and industrial equipment and promoting the economic empowerment of they members.
  • Legal Documentation: Legal documents, such Murabaha [1] agreements and terms of service, were reviewed and updated to ensure they comply with national regulations. This protects both Ebdaa Bank and its clients amid periods of uncertainty.
  • Marketing strategy: A marketing strategy was developed to promote the product among cooperatives and agricultural associations, with particular emphasis on social inclusion and financial sustainability.

 

[1] Murabaha is an Islamic financing structure that works as a sales contract, fixing the price of goods or items as required by a customer, inclusive of a pre-agreed profit margin.
Read the Fact Sheet on this link
𝗪𝗘-𝗥𝗜𝗦𝗘! is an EU-funded project with the objective of building inclusive, sustainable and resilient communities and creating an enabling environment for the economic, social and educational empowerment of women. The project is implemented by AICS Khartoum and UN Women.

>> About the project

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