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Germany Pledges to Disburse €12M for SMEs

Germany Pledges to Disburse €12M for SMEs

The German government has pledged to disburse 12 million Euros (over 13 million dollars at the current exchange rate) to finance small and medium-sized enterprises in Mozambique, especially those that operate along the Zambezi Valley.

To this end, the Zambezi Valley Development Agency and the German Development Bank (KfW) signed, on Tuesday, in Maputo, an agreement on disbursing this sum.

The amount is intended to strengthen the strategic value chain for small and medium-sized enterprises (SMEs). It also aims at reinforcing the current financial cooperation credit programmes budgeted at 41 million Euros, made available by KFW and the Bank of Mozambique.

According to the general director of the Zambezi Valley Development Agency, Roberto Albino, in the last five years, the government and cooperation partners, namely the World Bank, the Dutch government, the United States Agency for International Development (USAID), and Italian Cooperation have mobilized and channeled 100 million dollars to support private sector initiatives in order to strengthen the strategic value chain of around 1,500 small and medium-sized enterprises.

“This agreement aims to make resources available in the form of grants to establish a support mechanism for SMEs through collateral coverage of up to 50 per cent. The amount contributes to increasing access to subsidized financing (8-10%), made available by KFW, and the Bank of Mozambique through commercial banks, to the tune of 41 million Euros in the Zambezi Valley, covering the central provinces of Sofala, Manica, Tete and Zambezia”, Albino said.

He said that access to financial services for the private sector in a competitive and sustainable way remains a priority for the Zambezi Valley Agency, as it is a vehicle for the implementation of the strategic plan for the development of that region, “PROZAMBEZE 2023-2032.”

For her part, Christine de Barros, head of Cooperation at the German Embassy, said that the 12 million Euros to be made available by the German bank KFW is aimed, among other things, at creating jobs and income opportunities for small farmers.

“The programme consists of three pillars, namely guarantees for financing institutions, climate insurance, advisory services to support leading companies in the value chain, such as loan applications at partner financial institutions yet to be selected”, she said.

She also said that Germany intends to disburse, in the near future, 30.5 million Euros for the credit line.

“It is a joy to realize that the issue of agriculture is gaining momentum in Mozambique with various initiatives”, she added.



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