Supporting our Field Partners in South Sudan

Now and then we become aware of a brewing situation that may have an impact on Deki lenders and we do our best to inform you about these situations as soon as possible.  Following conversations with our Field Partner Hope Ofiriha, who operates in Uganda and South Sudan, we have become aware of some challenges facing the clients they are working with in South Sudan.

In most countries we work in, we provide loans in the local currency to limit any currency fluctuation risk to the clients.  Unfortunately, because of the newness of the country of South Sudan, it is extremely difficult to use the South Sudanese currency.  Most currency exchange companies do not buy or sell it because of the instability of the country and currency.  As such, when we started our partnership with Hope Ofiriha, they decided it would be most useful for us to send loan money to them in Ugandan Shillings.  Their clients are living and working in both South Sudan and Uganda, so this approach made sense to us and to them.

When they provided loan capital to their clients in South Sudan, they would exchange the loan capital locally and provide loans to clients locally in South Sudanese pounds.  Clients were still responsible for repaying the Ugandan Shilling equivalent, but in South Sudanese pounds.  This worked well for a while as the South Sudanese pound was relatively stable, but with tensions in the area increasing, the currency has started to lose its value.  This means that the value of loans owed to Deki lenders is increasing for our entrepreneurs in South Sudan. They have to earn more South Sudanese Pounds to pay back the amount in Ugandan Shillings (which has remained stable).  

We have had feedback from our Field Partner that this is a growing concern for their clients, and likewise it is a growing concern for Deki and our lenders.  Our intention in providing loans is to do good and provide solid income generating opportunities, not to create debt scenarios for clients that leaves them in poverty.  With this in mind we are currently working with Hope Ofiriha staff to find a way forward that will ensure Deki clients are not being left worse off as a result of receiving a loan.  It is likely these conversations will continue for several weeks, but we expect the result will include the need to write off a portion of the loans provided to some clients in South Sudan.  Over the coming weeks we expect to gain a much clearer understanding of the situation, including exactly which loans are affected and what the expected write off will be.  This write off, due to currency fluctuation, will unfortunately be passed on to Deki Lenders in accordance with our Terms and Conditions.  

As soon as we have details of the loans affected we will inform lenders directly.

This is upsetting news for us, as sharing any news of possible loan loss is disappointing.  However, in this scenario, we hope you will agree that protecting the future of the South Sudanese clients is of the up-most importance.  As this situation develops, we will keep you informed.  In the meantime though, please keep in mind that the south Sudanese clients are struggling because the situation in the area is very difficult.  This means that your continued support of these clients, despite the currency fluctuation risk, is critically important to them.


Diane Rafla
International Operations Director