THE IMPACT OF FOREIGN FINANCIAL INSTITUTIONS ON THE LOCAL FINANCIAL INSTITUTIONS IN ECONOMIC DEVELOPMENT IN SOUTH SUDAN.

Abstract

Background:

This study aims to assess the impact of foreign financial institutions on the local financial institutions in economic development in South Sudan.

 Methodology:

The study used a case study as a design, and both quantitative and qualitative data were collected.

 Results:

The majority of the respondents were between 30 and 55 years some are graduates hence vast knowledge and skills. The study showed that some respondents have worked in the Ecobank foreign commercial bank in South Sudan for a period between 3 years to 5 years. 

Foreign financial institutions tend to equip themselves with much better customer information through professional database management than local banks. That helped the foreigners to gain better access to very important persons (VIPs) customers, whether foreign or local enterprises, whether wholesale or retail clients, whether individuals or firms. The presence of foreign financial institutions stimulated a more competitive environment in South Sudan's banking sector, in turn encouraging local banks to respond through financial innovation to provide the best customer services.

 Conclusion:

Foreign financial institutions typically carve out a market niche by bringing in new management and advertising techniques, more advanced financial technology (e.g. credit cards, off-balance sheet accounting), and the latest in computing methods. It is also hoped that the introduction of new technology will cause local banks to imitate foreign banks. A positive externality arising from this is training foreign banks impart to local staff and management on the use of these new technologies. This helps to increase the information of most local bankers and Potential stockholders.

 Recommendation:

There is a need for the government to have a clear financial policy to control foreign investment as currently most of the foreign investors do not plough back their profits into building the economy of South Sudan.