How Microfinanza is enhancing Women’s Economic Empowerment in the Red Sea State: revolving funds and financial education to women and youth living in vulnerable conditions.

Francesco Tuffi

Expert in financial inclusion

Microfinanza’s strategy in Sudan is built on over 20 years of experience providing financial inclusion expertise in Africa and the MENA Region, working with International Donors, Financial institutions, the private sector, and local communities to promote Financial Inclusion and Local Economic and Social Development.

Due to the complexity of the country, its size, and the recent political and economic challenges, each new initiative has been highly customised and tested based on the unique needs and circumstances of target groups in each locality.

The Republic of Sudan – the third largest African country – is in fact a multiracial, multicultural country composed of 18 regions and more than 180 localities. The population reaches 47.93 million inhabitants, of which about 70% live in rural areas, and 8% are nomads. Due to internal conflicts, there are also around 3.24 million IDPs (Internal Displaced People), while there are 1.15 million refugees from surrounding countries, due to regional conflicts. The population is growing fast (growth rate is 2.55%), and about 46.5% of the population lives below the poverty line, earning less than $ 1 a day. The country’s economy was strongly hit after the war and separation from South Sudan in 2011 and lost most international support after the coup d’etat in October 2021. The Country is in growing debt distress: the primary internal challenges include structural vulnerabilities, unemployment, external debt, climate change and low labour and capital productivity. Also, low productivity growth in manufacturing and agriculture due to inadequate infrastructure, power shortages, and an unfavourable macroeconomic environment is limiting small and medium entrepreneurs’ growth. The private sector is constrained by limited access to finance, a low-skilled labour force, and an inadequate legal and regulatory framework. In Sudan, every state presents its own tribal and cultural features, its peculiar driving economic sectors, as well as its intrinsic frailties.

WE-RISE!, the project financed by the European Union and jointly implemented by AICS Khartoum and UNWOMEN, enabled the launch of a first Technical Assistance intervention in the first weeks of January 2023 in the Red Sea State, in cooperation with the local microfinance NGO PASED (Port Sudan Association for Small Enterprise Development).

Port Sudan, the State’s capital city, constitutes the main Sudanese harbour and commercial hub. During the last decades, tribal clashes exacerbated socio-political instability and worsened the economic crisis affecting the country by forcing a slowdown in many women-led Income Generating Activities (IGAs). For this reason, since early 2015, few local non-governmental organisations (NGOs) and Micro Finance Institutions (MFIs) have begun to sponsor the creation of women’s associations with the dual goal of a) Providing sharing spaces and safety nets for association members b) Providing a shared source of capital to startup or improve women-led Income Generating Activities (IGAs).

To ensure the financial benefits originating from the membership of the women’s associations, NGOs and MFIs provided the associations with initial seed capital for starting “Revolving Funds”, locally known as  Almal Aldwar.  The Revolving Funds observed in the Red Sea State are a peculiar form of ROSCAs (Rotating Saving and Credit Associations) through which a selected group of people have the possibility to take in-kind loans on a rotating basis under the supervision of a managing authority, the so-called fund committee. This Sudanese form of Revolving Funds – designed to respect Islamic finance and its regulations – do not charge any interest on loans. The absence of interest rates, in addition to the hyperinflation that hit the Country, caused an enormous decrease in Sudanese Pound purchasing power and the depletion of shared group capital.

Following a series of field Assessments, the Microfinanza’s team has identified more than 4,000 women belonging to 60 women’s associations benefiting from revolving funds. However, between 2019 and 2021 deadly tribal clashes between Beni Amer and Nuba in Red Sea State prevented women belonging to women associations from gathering regularly and from benefiting from the revolving funds. Nowadays, while there has been a mitigation of the tribal clashes and a related growing sense of safety in the State, the progressive decrease in the purchasing power of Sudanese people due to the devaluation of the currency is jeopardizing the impact of the entire revolving fund scheme. In fact, in the absence of new injections of seed capital within the revolving funds, the initial capital allocated by NGOs and MFIs is no longer sufficient to meet today’s prices of goods that demand higher loan amounts by micro-entrepreneurs belonging to the women’s associations.

In this context, Microfinanza Srl decided to build on this consolidated financial scheme and upgrade some of its features thanks to its know-how and expertise. The work done to improve women’s associations in Port Sudan is twofold: non-financial services – such as IGA (Income Generating Activities), business development and financial education training – are provided to women’s associations’ members to improve their entrepreneurial soft skills. Moreover, new capital for the revolving funds is injected into each women association’s bank account to fund their entrepreneurial initiatives. To ensure the sustainability of the revolving fund scheme and to contrast the physiological capital depletion, the Microfinanza’s team introduced the payment of administrative fees in compliance with Sharia law.



  • Microfinanza Inception Report – 2022
  • Microfinanza Preliminary Assessment – 2023
  • Microfinanza Field Mission Reports – 2022-2023

2022 est. Data source:
2021 est. Data source:
2022 est. Data source:
2014 est. Data source:


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