IMPORTANCE AND PROPERTIES

OF MF

REVISION - Financial system- MDGs & poverty - Financial exclusion & financial inclusion - Mf methodology

WHAT ARE THE IMPORTANCE AND THE ROLE OF MF?

The importance of the MF stems out from its important roles in reduce poverty and contribution to the economic and social development operations

MF CONDUCTS THE FOLLOWING:

Provide financial and non-financial services for small projects sectors

Increasing the participation of the small sector in the national economy

Increasing the income of the small projects owners

Contribution to reduce the problem of unemployment

Introduction of entities able to offer these services continuously,

THE PROPERTIES OF MF

What distinguishes the MF from the other financial types?

1-MF is an information-based financing2-MF funds part of or the whole or more than

one project circle3-The financing is given to both the customer

and the activity

Negative behaviors' infection is spreading among the customers requiring an effective decisiveness.

Social relationships have an important role in MF.

MF is a development financing that change positively the customers' behaviors for it includes an educational process.

2-\ WHAT IS THE FINANCIAL INTERMEDIATION:

The financial institutions act as a financial intermediary between the parties of economic transactions

The first party: the owners of the surplus: they are those whose income is more than their expenses

The second party: the owners of the deficit: they are those whose expense is more than their income

The financial institutions are considered the best direction for realizing the two parties' interests. This can be realized through gathering the small amounts from savings and deposits of the large numbers of surplus's owners and offering them to with huge amounts to the deficit's owners.

3\ WHAT ARE THE FINANCIAL MARKETS?

FINANCIAL MARKETS?

Money market

Capital market

MONEY MARKET It is the market where short-term

transactions take place (less than a year). It mainly concentrates on the transactions related to debts and loans and the commercial banks (deposits banks) are one of the important institutions operate in this market

CAPITAL MARKET It is the market where the long-term

transactions take place (more than a year). It mainly concentrates on the transactions related to property rights (shares and bonds) and the special banks (investment banks) are one of the important institutions operating in this market.

Break 5 min

3 PROBLEMS FACING THE MF IN SUDAN:

STATE'S PROBLEMS strategic plans The non-existence of an administrative and legal umbrella for the MF.

The high taxes‘ lack of information.

BANKS' PROBLEMS the high of financing cost. un sufficient guarantees valid working license certificate for the operation site The smallness of the amount of money Weak follow-up to the financing projects

due to the lack of staff. The majority of banks' branches are

concentrated in the big cities

C\ SMALL BUSINESSES SECTOR PROBLEM:

The producers' failure to marketing The high cost of the raw materials Lack of the administrative aspects

experience