In July we told you some information regarding the devaluation of the South Sudanese currency that was affecting Deki clients. Through conversations with our field partner Hope Ofiriha, we now have a much better understanding of the situation and are able to provide a further update.
The South Sudanese currency has lost about 30% of its value over the past six months. Factors causing this devaluation include the political situation and civil unrest in the country. While the devaluation month on month has slowed down, it’s likely the currency will continue to fall in the coming months.
In an effort to ensure entrepreneurs are protected and their livelihoods aren't put at risk by increasing debts, Deki has a policy of passing currency fluctuation on to Deki lenders. This policy has been in place since Deki started, but this is the first time the currency devaluation has been significant enough to have to pass on to Deki lenders.
In brief this means that if you currently have an open loan to a client in South Sudan, you will notice a loss of around 30% of your loan capital by the time the entrepreneur has fully repaid.
By passing on this loss to Deki lenders, this should allow the entrepreneurs to still use, and benefit from, their loan investment as they originally planned.
We are also working with Hope Ofiriha to ensure the loan products offered to clients are appropriate in size and length to protect both the client and Deki lenders from any additional, unnecessary risk.
The situation in South Sudan means our clients are even more acutely in need of Deki loans. There are scarce few resources available to entrepreneurs in the area and this makes the willingness of Deki lenders to continue to lend in South Sudan, despite the risk, critical to our clients. The women we work with are strong, resilient and eager to continue their efforts to grow their businesses and they are profoundly grateful to Deki lenders who are so willing to invest in them and their businesses.
Thank you for your understanding. If you have any further questions, or would like to know the state of your South Sudan loan please don't hesitate to get in contact by email via firstname.lastname@example.org
International Operations Director