South Sudanese lender Liberty Commercial Bank plans to expand its retail business with the help of foreign investors and is looking for a partner in Dubai to tap rising trade with the Gulf, a senior executive said.
Launched last year with one branch and funded by South Sudanese and Kenyan investors, Liberty is one of the latest entrants to one of the most under-banked markets in the world.
Devastated by decades of civil war before it broke away from Sudan in 2011, South Sudan, with a population of nearly 12 million, has struggled to build up state institutions and laws since winning independence.
The lack of an efficient legal system has not deterred foreign banks from arriving, including Kenya Commercial Bank , Qatar National Bank and a bank funded by Dubai Islamic Bank.
South Sudan has a handful of local banks including Liberty, which were established in the run-up to or since independence. They have set up shop in the ramshackle capital Juba, urging people via billboards lining the dusty streets to deposit their money amid a sharp rise in crime in the city as the government struggles to assert control in a country awash with guns after the 1983-2005 civil war.
Liberty says it has already attracted $15 million in funding from investors. This week it held meetings with unnamed potential investors from Uganda about broadening its shareholder base as it wants to open 10 branches by 2018, Emmanuel Batali, head of strategic planning told Reuters in a recent interview.
"There have also been some UK people, a Canadian group and there is also an expression of interest from India," said Batali, a South Sudanese who worked in Canada as a civil servant for many years.
The bank plans to have four branches open by the end of this month to serve its 20,000 clients, Batali said.
"Now we are looking at mobile banking, phone banking, even potential for drive-in banking like in America," he said. "Branches will have automatic teller machines. We have the software now."
Batali said Liberty was also in talks with banks in Dubai to help channel money flows between the two countries. "We are not going to open in Dubai but we are talking to banks in Dubai that can do your business transaction there," he said.
Dubai is a main source of imports for South Sudan which has almost no industrial production. Anything from corn flakes, to wheat, juice or cement is shipped from the Gulf to the Kenyan port of Mombasa from where it is trucked for weeks to the landlocked nation.
Business prospects have improved since the government agreed in March with Sudan to resume oil exports through the north, bringing in badly needed dollars.
"The biggest challenge is we are a country that depends on imports. We do not export anything except oil. If oil was not there we would be totally out of everything," Batali said.
Banks have also had liquidity problems as a 16-month shutdown of oil production has diminished the supply of dollars available from the central bank, he said. The central bank has not said whether it has resumed pumping dollars to banks after booking oil revenues of around $730 million in September, the first since exports through Sudan resumed in April.
