Mozambique: U.S. government partners with GAPI to support local small businesses

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Mozambique: U.S. government partners with GAPI to support local small businesses

9:44 CAT | 18 Apr 2023

FILE - Representatives from USAID Mozambique for USAID SPEED Program and GAPI signed a grant to establish the MSME Resilience fund on January 20th, 2023. [File photo: US Embassy in Mozambique]

The The U.S. Government, through the United States Agency for International Development (USAID), announced a new fund to help small businesses in Central and Northern Mozambique to overcome the shocks of recent cyclones and the Covid-19 pandemic. This fund, totaling $4.5 million, will provide affordable credit tailored to the needs of small firms in the agriculture and food sector, prioritizing women-owned and youth-owned businesses. The Mozambican public-private development bank Gabinete de Apoio e Consultoria a Pequenas Indústrias (GAPI) is contributing $500,000 of the total and will provide affordable credit combined with technical assistance to micro, small, and medium enterprises in Cabo Delgado, Nampula, and Sofala. USAID will contribute the remaining $4 million through the USAID SPEED program, targeting 3,000 local businesses over the next two years.

Just as small companies in Mozambique were beginning to recover from cyclones Idai and Kenneth, the COVID-19 pandemic took hold and forced the closure of many small businesses. With climate experts predicting more frequent extreme weather events in coming years, the United States Government has been working with the Government of Mozambique to to support Mozambicans facing economic shocks. This partnershipwill reach 3,000 local businesses over the next two years, allowing access to funds for restarting a business after an unexpected shock. These funds will allow for small businesses to recover more quickly in provinces such as Sofala, Zambezia, and Inhambane due to the damage from cyclone Freddy.

USAID Mission Director Helen Pataki said “USAID is excited to partner with GAPI to establish a sustainable revolving fund that will provide affordable financing to businesses in future times of crisis. This credit availability can make the difference between a small business remaining open after a shock and providing services to Mozambicans or closing.”

Support to small local businesses is an important component of the broader U.S Government assistance in Mozambique. In close collaboration with the Government of the Republic of Mozambique, the U.S. Government provides more than $700 million in annual assistance to improve diversified and inclusive economic growth, promote economic prosperity, and support the overall development of the nation.

About USAID

The United States Agency for International Development (USAID) leads the U.S. Government’s international development and disaster assistance through partnerships and investments that save lives, reduce poverty, strengthen democratic governance, and help people emerge from humanitarian crises. For more information about USAIDs work, visit www.usaid.gov.

Source: US Embassy in Mozambique / Press Release