Mozambique: Bank to fund SMEs targeting oil and gas sector – Lusa

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Mozambique: Bank to fund SMEs targeting oil and gas sector – Lusa

7:00 CAT | 04 Aug 2023

Photo courtesy: Millenium Bim

The International Bank of Mozambique (Millennium BIM), one of the largest in the country, will finance small and medium-sized enterprises (SMEs) supplying oil and gas projects, aiming to allow this segment to take advantage of the opportunities created in hydrocarbons.

“Our concern is mainly with supporting local companies” so that “these projects are inclusive,” said João Manuel Martins, chairman of the executive committee of Millennium BIM, an institution majority owned by Portugal’s BCP Africa (Millennium BCP group), with a 66.69% stake.

Martins was speaking to journalists after signing a memorandum of understanding with Empresa Nacional de Hidrocarbonetos (ENH), the business arm of the Mozambican state in the sector.

Recognising that “the cost of money is high in Mozambique”, the manager said that BIM would try to place its financing at a “competitive price” so that SMEs take advantage of the opportunities offered by the oil and gas sector.

In the financial sector, “you cannot grow by charging high rates. We will try to practice the lowest possible rates”, emphasised João Manuel Martins.

The chairman of ENH, Estêvão Pale, considered it important to strengthen the financial capacity of Mozambican SMEs to be able to operate in hydrocarbon projects, taking into account the high degree of demand imposed by multinationals in the industry.

“The oil and gas area is a very demanding area, and national companies need to be trained, not only in technical terms and standards but also in terms of financing”, Pale said.

The agreement signed on Tuesday by Millennium BIM and ENH is valid for five years, and the amounts will be made available according to the needs and repayment capacity of the beneficiary companies.

In the first half of this year, according to financial statements consulted by Lusa, BIM Mozambique’s consolidated profits increased by 3.2%, compared to June 2022, to 3.36 billion meticais (€47.9 million).

As of 30 June, the bank had a share capital of 4.5 billion meticais (€64.1 million), mostly held by BCP Africa (Millennium BCP group), with a 66.69% stake, followed by the state of Mozambique (17.12%), the Mozambican National Social Security Institute (4.95%) and the Mozambican Insurance Company (4.15%), among other shareholders.

According to central bank data, 15 commercial banks and 12 microbanks operate in Mozambique, in addition to credit cooperatives and savings and credit organisations, among others.

Source: Lusa