# Vignette 26: South Sudan's digital Sanduk
In Warawar, a border market between South Sudan and Sudan, communities have faced the challenge of accessing financial services. With no formal banks and multiple challenges ranging from floods to border insecurity, local traders developed their own solution: a traditional savings scheme called "Sanduk," meaning "box" in Arabic.
For generations, the Sanduk system served as a form of social capital and financial security, where members would contribute small amounts regularly, with the pooled funds available for loans. However, in Warawar Peace Market, these loans came at a high cost; interest rates averaged 30%, placing a burden on vulnerable traders, especially women and youth who lacked assets for traditional collateral.
In response to an innovation challenge from UNDP's Africa Borderlands Centre focused on improving cross-border trade and financial access, the UNDP Accelerator Lab of South Sudan worked to digitize the traditional Sanduk.[\[1\]](#endnote-1) Working with mGurush, South Sudan's main mobile money provider, they created a digital platform (Figure 41) that would preserve the community-based nature of the Sanduk while making it more accessible and efficient.
The team divided existing Sanduk groups into experimental and control groups. The control groups continued operating with the traditional box throughout the experiment period. The experimental groups received digital wallets mimicking the traditional system, along with mobile phones and training in digital literacy, financial management, and mobile money usage. They also provided gender sensitivity training after discovering that some husbands were hesitant about their wives traveling for business.
By April 2023, interest rates had dropped to between 15-20%, driven by competition between different Sanduk groups. The impact was visible in individual success stories like the one of Bakita, who operated a hotel in Warawar. Through access to loans from the digital Sanduk system, she was able to expand her hotel from 14 to 22 rooms.
What began as a small experiment has grown into a nationwide success, pioneering a new approach to financial inclusion. The digital Sanduk – a first-of-its-kind digital fintech Sanduk group wallet – now reaches 3,000 people across South Sudan, a 23-fold increase from its initial reach. This remarkable growth demonstrates the power of technology to bridge the gap between traditional practices like the Sanduk and modern financial services, especially in regions where formal banking infrastructure is absent.
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**Key takeaways:**
* **Start with existing community solutions:** See if there is an opportunity to build on social and cultural aspects that make traditional systems work, combining them with modern technology and services.
* **Look for ecosystem partners:** Look for actors in the ecosystem who have the connections, capability, technology or resources who can help catalyse or scale an innovation.
* **Create enabling conditions:** Address cultural and social barriers, like gender dynamics, that might affect adoption.
* **Test, improve, grow:** Use controlled experiments to learn what works and improve the solution before broader rollout
* **Document evidence of change:** Measure and record quantifiable improvements, from financial metrics to user adoption, to demonstrate the value of the innovation.
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## Notes
1. UNDP South Sudan (2023), also see UNDP Accelerator Labs (2023) for a short video of this initiative. [↑](#endnote-ref-1)
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