There are about 3 three major factors that have led South Sudanese not to be creditworthy.
In a recent statement, the Bank of South Sudan urged commercial banks to boost lending to the private sector to at least 40% of total deposits. Additionally, the bank decided to keep its annual interest rate at 12 percent and its minimum reserve requirement ratio at 20 percent of commercial bank deposits in both local and foreign currency.
1. Lack of collateral security
However, many South Sudanese, according to Dr. Ahmed Morjan, lack collateral security to obtain a loan from a bank since they are not creditworthy. He thinks that a lot of individuals in the nation are unaware of how the Central Bank regulates loan provisions.
2. Sufficient availability of collateral security from foreign investors.
The economist claims that foreign nationals profit more from the commercial banks in the nation than South Sudanese because they can offer the banks collateral securities in exchange for loans and because they are very familiar with how the banking system works.
One’s creditworthiness refers to how “worthy” or deserving of credit they are. The borrower is seen as creditworthy if the lender has faith in their ability to repay the amount on time. Lenders may charge you greater fees, grant you smaller loan limits, or even reject your application if they think you’re a risk.
3. Lack of paying one’s bills at the right time.
You may establish creditworthiness in several ways. Paying your bills on time is the easiest way to do it. When making a credit purchase, ensure you stick to your budget and shop within your means. Make an effort to clear any missed payments and create payment plans to pay off any debt that is past due. Paying more each month than the required minimum will help you pay off your debt more quickly and avoid incurring late fees.
4. Comprehensive knowledge about obtaining loans
It is also important to educate yourself on the provision of loans within the general banking system operating in the country.
Flexibility is one of the most beneficial aspects of a personal loan. Car loans are for cars, mortgages are for homes, but personal loans can generally be spent on pretty much anything you’d like. The lack of restriction gives borrowers the freedom to use the money how they need – whether that be starting a business, financing a wedding, or consolidating debt.
By: Dr. Ahmed Morjan