INSS credit line to assist SMEs affected by COVID-19: Interest rate of 4%, at BNI – Mozambique

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INSS credit line to assist SMEs affected by COVID-19: Interest rate of 4%, at BNI – Mozambique

2:33 CAT | 18 Jun 2020

File photo: O País

The 600 million meticais [around US$8. 5 million] National Institute of Social Security (INSS) credit line for small and medium enterprises affected by the Covid-19 pandemic will bear an interest rate of 4%.

A press release from the INSS on Thursday says that the amount declared is already available, with loans to be repaid within three years.

“The fixed interest rate is 4 percent, which can varies depending on the updates to the prime rate determined by the central bank,” the INSS note reveals. Interest will be paid semi-annually or annually, depending on the contract signed, and the capital must be repaid after 36 months.

The Banco Nacional de Investimentos (BNI) has been chosen to manage the scheme, because is a state banking institution and aligned with the objectives of the INSS.

“This way, the interests of workers are safeguarded, insofar as the risk in this investment has been fully transferred to the bank in question and, therefore, the INSS’s concern is to see the amount restored by the latter, under the conditions and dates to be agreed, because if the borrowers do not repay the amount, the losses will fall on the bank and not on the INSS,” the note explains.

The debt securities are registered with the Mozambique Stock Exchange (BVM), guaranteeing the implementation of reliable and traditional banking mechanisms, and mitigating the inherent risks.

“Credit will be made available through BNI, by way of deposit, observing the INSS criteria, namely: Being small or medium-sized; being enrolled in the Social Security system; being up to date with regards to the Social Security system, among other aspects that the bank may consider within its policy,” the press release reads.

Source: O Páis