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The Mozambique Guarantee Society intends to expand the financing sources of the Mutual Guarantee Fund, with the aim of increasing support for micro, small and medium-sized enterprises and facilitating access to credit in the country.
The president of the institution, Beatriz Freitas, explained that the number of partners interested in the mechanism has been growing and that negotiations are under way to secure new resources for mutual guarantees.
According to the official, the expectation is that within about a year the fund may receive new financing or, alternatively, a new instrument may be created to strengthen its capacity to support businesses.
The Mutual Guarantee Fund has been operational since last year and is implemented through Banco Comercial de Investimentos, Standard Bank and Absa Bank.
The mechanism currently has an allocation of 120 million US dollars, financed by the World Bank, and aims to support around 15,000 Mozambican companies and contribute to the creation of more than 20,000 jobs.
Beatriz Freitas said that other financing entities and development partners have already expressed interest in working with the Mozambique Guarantee Society to expand the system.
Since operations began, around 630 companies have benefited from the mechanism, with no cases of default requiring the Guarantee Society to execute any guarantees.
Despite the results achieved, most operations remain concentrated in Maputo, a situation the institution intends to change by expanding its activities to other provinces of the country.
The Guarantee Society is also considering the creation of a specific facility to support companies affected by extreme climate events, including floods and other situations that may disrupt business continuity.
The official also clarified that the Mutual Guarantee Fund does not provide credit directly to companies and does not operate as a subsidy.
Businesses apply for financing from a bank, which assesses the request and decides whether to grant the loan. The Guarantee Society intervenes by providing a guarantee, thereby reducing part of the risk assumed by the bank.
The institution believes that, at a more advanced stage, the mechanism could also contribute to reducing the interest rates charged to beneficiary companies.
For Beatriz Freitas, the first objective remains to increase the number of companies with access to financing. As the system matures and gains greater confidence among financial institutions, the expectation is that the cost of credit may also decline.
Agriculture is identified as one of the sectors with the greatest potential to benefit from stronger guarantees, due to its importance in the economy and the need to expand financing for businesses operating in the sector.
The Mozambique Guarantee Society believes that strengthening the mechanism could contribute to business growth, job creation, increased private investment and improved access to financing in Mozambique.
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