MOZAMBIQUE – Mozambican commercial bank, Moza Banco and the National Fund for Sustainable Development (FNDS), an institution under the Ministry of Agriculture and Rural Development (MADER), has signed a protocol to avail a 1.17 billion meticais (US$15.9m) credit line for the agribusiness sector.
The credit line designed, according to Moza Banco, constitutes a non-refundable grant component, which translates into a contribution in funds to support the strengthening of the equity of those business units.
The joint financing solution will be disbursed under the Sustenta program which was financed at US$500 million by the World Bank and initially launched in 2017 in Nampula and Zambézia provinces.
Its aim is to build capacity of farmers, set up production strategies, as well as offer financing solutions and generate about 200,000 jobs.
“In order to overcome this reality, we believe it is necessary to create financial products designed to fit the various players in an agricultural value chain.”Chairman of the FNDS Board of Directors – Claudio Borges
At the protocol signing ceremony, João Figueiredo, Chairman of the Board of Directors of Moza Banco, highlighted that the initiative will establish a healthy balance between the involvement of equity capital and bank financing for the benefit of the farmers.
According to data held by MADER, it indicated that less than 1% of agricultural producers in the country have access to bank credit.
“In order to overcome this reality, we believe it is necessary to create financial products designed to fit the various players in an agricultural value chain.
“Through this partnership, which will ensure transparency and compliance with rules, it has made it possible to create a credit line with conditions that we consider suitable for the agribusiness segment and will allow for greater integration and development of agrarian value chains, ” said Chairman of the FNDS Board of Directors, Claudio Borges.
The Mozambican government has defined agriculture as a priority for the economy, sees industrialisation of the agriculture sector and investing in commercialisation as among its main challenges.
According to official figures, the government will provide a total of 12 billion meticais (US$163.4m) in public investment for the 2020/2021 agricultural campaign.
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