South Sudan and Banks from Hell: Why not introduce a more Hassle-Free Banking?
27 Dec. 05
Real business is about reputation, reputation, and reputation. But in South Sudan, this message is yet to go through. And so what goes for a "Bank" in South Sudan is nothing more than building in which walk up and down the corridors a bunch of smartly dressed folks and bureaucrats, in ties. As to long queues of sweating clients spending a whole day in a queue waiting to catch their cheques, they may as well go to hell. Even aliens from the outer space will laugh to be told these are banks. My memories of trying to catch a cheque from my own account in a Sudan’s bank are hellish. They were extraordinary trauma. Even from London where I currently reside, dealing with banks in Sudan still feels like a holiday gone terribly wrong. Not a pleasant experience.
In mid 1990s, Ivory Bank opened in Khartoum to our greatest cheers to a first private South Sudanese bank. Only to be disappointed. I do not know about you, but whenever I transferred money to relatives in Khartoum through Ivory Bank from London, it would be more than 3 weeks before money is released to the beneficiary. This was despite the information from my bank stating that money should normally get there in not more than 48 hours at the latest. Not only that, even when the banks fees were paid at this end, Ivory Bank would still deduct a mammoth amount from the transferred amount (sometimes as large as US $25.00 per US $ 200.00). This was when I had already paid about £ 20.00 (about US $ 30.00) in fees at the sending bank in UK. One time I had to complain to my UK branch, and the excuse given by Ivory Bank for deducing the amount from transferred amount was that an Arab Commercial Bank which, according to the Ivory Bank, acts as intermediary between Western banks and those in Arab world, deducted the amount. My Bank was not convinced and they paid me a goodwill compensation of £ 20.00 ( US 30.00). The next time I wanted to transfer money through Ivory Bank, my Bank in the UK told me: Not to Ivory Bank. Ouch! A lost business.
So I moved my business elsewhere - to Khartoum Bank. The delays in paying out the money to the beneficiaries were minor. However, Khartoum Bank deducted $ 7.00 to $ 10.00, irrespective of whether or not their fees were paid at this end. It was a day light robbery. Yet you still haven’t seen anything until you get to Wau. There, all the banking code of practice (if there is any in Sudan) just disappears. Khartoum Bank in Wau is a law unto itself. My recent experience as well as that of others say that it takes at least 3 weeks for money to be paid out from the date of transfer from Khartoum. Khartoum Bank would only pay you in local currency. Suppose, you were on holiday, and you run out of money could you ask money to be transferred to you from abroad and get them on time? The answer is a stupid no.
The question is why banking has to be such a pain in Sudan? Can anyone tell me why someone’s cash that has been transferred and confirmed on this one end have been received by the bank is slept over by the receiving bank? Who are the main losers: banks or clients? I suspect everyone is a loser including banks, clients, and the national economy. Why is it so impossible to fix the problem? I believe ignorance and mindless corruption is to blame. Even a layman like myself knows that so called banks in Sudan are just breaking banking law, and the banking code and are not making brilliant business out of it as they are not driven by the needs of the customer.
Over the last few years more hassle free ways of transferring money have opened up. One of them is a Somalis owned company called Dahabshill. For a small sum of US $ 6.00, you can transfer any amount to Khartoum with no extra charges at the end. The beneficiary can catch the money in dollar or local currency. The money is paid out to the beneficiary the next day. In my experience, in more than 99% instances of transfer Dahabshill delivers as promised. When they get it wrong, they would apologize and move speedily to fix the problem. This is what I would call great business. This is what I call reputation: delivering as stated on the tins. If the Somalis can do it, why is it proving too hard for northerners and Southerners to do it?
And to be sure, there is a lot of business to be made by banks that reliably transfer money and pay them out on time. According to World Bank’s 2004 Global Economic Prospect report, the value of remittances by emigrant African workers was measured at $70 billion in 2001 which nearly doubled the development assistance provided by the rich countries to Africa. As for case of Sudan, I have no statistics but I guess they are substantial amounts. And the banks that can deliver high quality services with integrity will attract more customers and will make great profits.
Cash is the most liquid form of asset. That means if one has liquid asset, then that asset is easily convertible into a form suitable for exchange to purchase goods and services. Now imagine your relative waiting for more than 3 weeks outside Ivory or Khartoum Bank in Wau with empty stomach while their cash languish in the bank. What a mockery to banking code of practice? And what would any one make of the managers of those banks? They are not up to the scratch. Put an engineer in charge only armed with common sense and they can do better job than those MBAs.
For me, freedom is a result of sum total of small things in a nation that make life sweet for everyone- hassle free. Banks in South Sudan, new and old, would need to take stock and take a hard look at this rotten practice called banking which is not banking at all: it is corruption, robbery, and theft. If one has current account or saving account, they would need to receive services as stated in terms and conditions of use and contract. Money transferred from elsewhere and received by a bank ought to be paid out immediately to the beneficiary. Banks need to have a code of practice that sets the standard of service delivery to its clientele across sectors and across financial products and services.
GOSS can do much to bring about a change in banking for the better. A banking regulation and code of practice needs to be passed. Bodies similar to Financial Service Authority in UK, need to be set up to monitor how banks are adhering to banking code and regulation. Every year, a performance index for all the banks operating in South Sudan should be published to praise the high performers and to name and shame the worst offenders. Banks themselves would need to monitor their customer satisfaction through random but regular questionnaires, and confidential customer complaint reporting system. Banks that perform to a high standard should be awarded a Mark of Excellence in area of their performance to dangle proudly at the entrances! The laggard will be forced to catch up.
Just more "new" banks will not add any value without a change in direction of more competitive, hassle free, and customer centred service delivery. This will attract foreign investment, revitalise business, and give more meaning to freedom. It is all about doing good, improving quality of life for all, and still make profits. Good banking is the lubricant that makes the wheel of the economic nation turns smoothly. Good banking will not happen by accident, it will have to be made to happen, by design.
*First posted on ssnet on 27 Dec. 05 London, UK