Mozambique launches S$40 million fund to finance MSMEs

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Mozambique launches S$40 million fund to finance MSMEs

4:08 CAT | 25 Aug 2025

Photo: Domingo

The Mozambican president today launched a US$40 million Mutual Guarantee Fund to provide credit guarantees to at least 15,000 national Micro, Small, and Medium-Sized Enterprises (MSMEs).

“This instrument is not just a financial mechanism; it is a bridge to the recovery of the Mozambican economy. We expect this US$40 million to finance approximately 15,000 small and medium-sized companies, mostly owned by young people,” declared Daniel Chapo during the opening ceremony of the 60th edition of the Maputo International Trade Fair (FACIM), the country’s largest exhibition of goods and services.

The fund, which has initial financing from the World Bank (WB), is an opportunity to transform dreams into businesses and ideas into jobs for Mozambican youth, “especially women”, the president said.

“One of the concerns we hear repeatedly at private sector conferences is the difficulty in accessing financing. We know that (…) high interest rates have been an almost insurmountable barrier for small and medium-sized enterprises, which represent the heart of the national business fabric. Hence the creation of this fund, specifically dedicated to small and medium-sized enterprises, because they account for 90% of the dynamism of our economy, generating income and employment, especially for youth,” Chapo said.

The Mutual Guarantee Fund will be implemented by Banco Comercial de Investimentos (BCI) , Standard Bank and Absa Bank.

“We want to commend the banks that have already joined this initiative and encourage other banks to follow suit,” Chapo said.

He called for “swift, transparent, and inclusive” mechanisms so that the fund quickly reaches “those who need it most”.

Lusa reported in June that Mozambican MSMEs will have credit guarantees through the Mutual Guarantee Fund, created by the government with an allocation of 4.4 billion meticais (€64 million).

The Council of Ministers decree creating the fund, dated June 10th and consulted by Lusa today, mentions the objective of “promoting easier access to financing” for MSMEs, through the “granting of guarantees and counter-guarantees for credit taken out by this business segment” with national banks, to allow for “more affordable interest rates”.

It envisages that this public fund will provide “guarantees to credit institutions and financial companies, aiming to facilitate the granting of credit to MSMEs”, as well as “counter-guarantees for the execution of operations by mutual guarantee companies and other financial institutions dedicated to providing guarantees” to this business segment.

A total of 3,150 Mozambican and international exhibitors are expected starting today at the 60th edition of FACIM, Mozambique’s largest exhibition of goods and services, which will run until August 31.

In addition to exhibitions and other business-related activities, the event will also host a business forum with South Africa, he added.

A display of military and police equipment is also planned, aiming to “show that they shouldn’t be afraid of service”, but rather see defence an opportunity in the civic sector, as previously stated by Sérgio Macuácua, director of FADM.

Every year, Mozambique’s largest business fair showcases Mozambique’s economic potential and business and investment opportunities in the country’s and international business sector, and also features other activities, including seminars, promotional sessions and business exchanges.

Source: Lusa