The Role of Agricultural Bank of Sudan in Financing Small Farmers: A Case ‎Study of Rahad Branch in Kordofan State ‎

Abstract

Sudan as one of the developing countries has been suffering from economic crises, ‎which are escalated with political instability as well as environmental problems. The ‎agricultural sector is the leading sector among all sectors of national economy. ‎Therefore, the presence of comprehensive and effective agricultural credit policy is ‎of vital importance.‎ The Agricultural Bank of Sudan is the one of specialized formal credit institution that ‎is responsible for the development and promotion of the agricultural sector since its ‎establishment in 1957. ‎ This study would like to investigate and evaluate the role of the Agricultural Bank of ‎Sudan in Kordofan State with emphasis on Rahad Branch. Moreover, the study was ‎conducted to describe the credit markets and to investigate the performance of the ‎Agricultural Bank. ‎ The Agricultural Bank of Sudan in Kordofan State started its activity in ‎Delling in 1970 and latter opened branches at Ummrawaba and ElObeid in ‎late 1970s and started its activity in Rahad in 1994. The study described the ‎nature of agriculture in Kordofan State and the role of the ABS as well as the ‎finance system in Rahad area.‎ The study followed statistical descriptive modeling and frequency analysis. It ‎elaborated on forms of finance and the farmer cash flow as well as profitability and ‎gross margins of the crops. The study concluded that the ABS finance size ‎increased rapidly during the seasons 2001, 2002 and 2003 (ABS reports, 2001, ‎‎2002, 2003). However, in Kordofan State the problem of finance still existing and ‎according to the ABS reports (2001, 2002, and 2003) out of the total fund Kordofan ‎received only 5, 3 and 5% for the years 2001, 2002, 2003, respectively. Although ‎the size of finance is very small, Rahad Branch exerts efforts to finance the farmers. ‎Also the study concluded that salam was the main mode to finance the farmers and ‎constituted about 60% compared to other modes as reported by Rahad Branch ‎‎(2004). Finally the study concluded that the credit services play an important role in ‎improving crop production if applied properly and at a suitable time. Solutions and ‎recommendations are suggested to strengthen the formal financial system.‎