ABSTRACT
Agricultural fi nancing has probably been the main limiting factor facing the development process in Sudan. In such an economy with a large traditional sector, savings by workers are very low. Since labor income is mostly consumed, the saving that does occur mostly consists of retained earnings, the only fl exible and secure savings supply. Hence, the savings share from capital income is relatively high.193 Nonetheless, it has been argued that savings are low because capitalist profi ts are low, relative to national income.194 Moreover, the infl ationary environment, with imperfect market information, makes long-term lending risky. Banks concentrate on fi nancing working capital as part of the general policy of sustaining short-run programs designed to maintain the already existing productive capacity. On the supply side, most of the population are poor and have no confi dence in the few savings institutions that exist. As a result, personal savings are low, both on average and at the margin.
