The issue of financial inclusion has been the subject of debate for years and was once again put at the top of the agenda when the Governor of the Bank of Mozambique, Rogério Zandamela, recently addressed the issue once again, referring to the role that banking, in general, should play in increasing financial inclusion in a country that still has profound weaknesses in terms of access to financial services, especially the most vulnerable sections of the population, which, in a way, slows down inclusive development efforts.
On this key issue for the country’s sustainable development, Gapi SI is endeavouring to make a range of financial solutions available to some of the most vulnerable sections of the population who are far from financial services. To this end, at the end of 2023, Gapi launched the Nlhuvuko project, which is another of the various financing solutions that the institution offers throughout the country.
In an interview with Diário Económico (DE), the initiative’s coordinator, Edwina Ferro, talks about the progress made so far, the importance of the initiative and its impacts.
What is the importance of the Nlhuvuko project for the population of the city of Matola?
The Nhluvuko Project came about in response to a baseline study carried out by Mozal through Gapi – Sociede de Investimento – in the municipalities of Boane and Matola, where various players in the local entrepreneurial ecosystem were consulted and shared their main challenges and barriers to accelerating their businesses, their training needs and their vision for local development.
These contributions were the basis for the development of an inclusive, multi-interventional project that responds directly to the expectations and needs of local entrepreneurs, contributing to increasing income, generating decent jobs and improving the living conditions of the beneficiaries. More broadly, it contributes to improving access and the provision of quality services to local communities, increasing the local tax base, financial inclusion and reducing social inequalities.
In terms of funding, this will mean almost a million US dollars made available by Mozal to be invested in small businesses in these two districts based on the selection rules based on the skills and commitment of the applicants, as well as the rigour of the management standards of these businesses that Gapi promotes, we will certainly contribute to the emergence of more entrepreneurs, more sustainable tax-paying companies and more formal jobs.
Apart from the financial resources, what can micro, small and medium-sized businesses benefit from the project?
From our point of view, the financial resources that MSMEs have access to through the Nhluvuko Project represent the culmination of a whole process of not only technical preparation, but also a mentality in which we try to instil in the beneficiaries the importance of developing an entrepreneurial attitude, with social and environmental awareness, for their own development, as well as for their community, in a relationship of interdependence.
Nhluvuko beneficiaries are equipped with technical skills in management and business development, with practical tools that can be adapted to their businesses, social and leadership skills, as well as personalised support in their workplaces that encourages the practical implementation of the improvements learnt in the classroom. After accessing the funding, they continue to benefit from regular coaching, access to opportunities to showcase their products and services and market connections, networking opportunities and assistance opportunities to expand their businesses.
The project was launched last year, so it’s still in its infancy, but what results do you hope to achieve with it?
The project was designed to run for an initial period of five years, in which it is expected to directly benefit more than 200 MSMEs in various economic sectors in the two districts, through training in business management; support 120 companies in formalising their businesses; finance between 165 and 170 MSMEs through the project’s revolving fund, which in terms of impact will represent an increase in turnover of at least 30% in the beneficiary companies; reduce the informality of the beneficiary companies by 50% and increase access to financial services by 70%, supporting the creation and maintenance of at least 600 jobs.
How do you see the role of financial institutions like Gapi in promoting development and financial inclusion?
As a development finance institution, Gapi-SI plays an innovative role in implementing initiatives like these. We apply methodologies adapted to the local context, with geographical and cultural proximity, as well as having the capacity to guarantee continuous support for entrepreneurs in the short, medium and long term.
We are a solid institution, with good governance standards, internationally certified and recognised both by the government and local leaders, as well as by the beneficiaries of the different development programmes implemented throughout the country. Institutions like Gapi-SI have the capacity to provide a full range of services to segments that are generally less covered by traditional banking, which is proven by the institution’s visible impact on the mobilisation and application of funds and the trust of its partners over 34 years of experience.
