Determinants of Liquidity Shortage Risk in the Banking Sector in Sudan

Mai Mahmoud Abdo — Thu, 19 Aug 2021 00:00:00 +0000

The aim of this study is to investigate the determinants of the liquidity shortage risk in the banks operating in Sudan, it applies panel logit regression model for the sample of 25 banks during the period from 2012 to 2017. The dependent variable
is the extreme shortage of liquidity which has been identified by using Value at Risk (VaR) technique. The independent variables are bank specific and macroeconomic factors. The bank specific are the banks’ size measured by the total deposits, the
investment variable measured as the total finance extended through the modes of finance, and the profit approximated by the net profit. The macroeconomic factors are the black market exchange rate premium and the budget deficit. The findings of the
analysis show that the bank size and the investment are significantly associated with the liquidity shortage risk but negatively. This implies that the larger the bank, in terms of total deposits, the lower the liquidity shortage it faces, moreover the investment is dominated by short term investments, i.e. deferred sales receivables (murabaha financing). The profit factor is also negative but insignificant, this implies that banks’ profits can be generated via short term investment activities that increase cash holdings
of the banks and reduce liquidity shortage. The black market exchange rate premium is positive but insignificant whereas the budget deficit is positive and significant. The positive sign of the black market exchange rate premium implies that increase in the
exchange premium lead to decrease in the local currency value which induce higher deposit withdrawals by the depositors also banks reduce their holdings of local currency, and this increase liquidity shortage. The positive sign of the budget deficit
factor implies that the government finances its deficit mainly by resorting to debt financing (money creation), this lead to increase in inflation rate which cause depreciation of the value of the local currency, this induce the banks to adjust their
portfolios of local currency holdings as a result the liquidity shortage increases. The stress testing results reveal that as the black market exchange rate premium increases the probability of the liquidity shortage risk rises, therefore the Sudanese banking
system is susceptible to high liquidity shortage risk as the black market rate premium exceeds 50 Sudanese pounds per dollar

Assessing the Organizational Culture of Family Owned Firms in Sudan

Islam Mohamed Mahmoud, Ibrahim Ahmed Onour — Thu, 19 Aug 2021 00:00:00 +0000

This study aims at assessing and exploring the organizational culture in the Sudanese family firms. The study tries to identify the types of the Sudanese family firms according to the degrees of family involvement in the business and assesses the orientation
of the Sudanese family firms toward different organizational cultural typologies and then examining the relationship between the types of the family firms and the different typologies of the organizational culture. To achieve the study objectives, the organizational culture assessment instrument (OCAI) derived from the competing values framework is
adopted which identifies four typologies; Clan, Adhocracy, Market, and Hierarchical culture. Among 130 Sudanese private family firms originally contacted, 103 agreed to participate in the study. The findings of the study indicate the heterogeneity of the Sudanese family firms based on the components of involvement, and the different types of the family firms exhibit different cultural typologies according to the level of family involvement in the business.

Khartoum University Journal of Management Studies

Determinants of Liquidity Shortage Risk in the Banking Sector in Sudan

Assessing the Organizational Culture of Family Owned Firms in Sudan