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BVM: “The Financial System Should be an Instrument to Finance the Economy”

BVM: “The Financial System Should be an Instrument to Finance the Economy”

The president of the Mozambique Stock Exchange (BVM), Salim Valá, led an open class this Tuesday, 21 February, at the Technical University of Mozambique (UDM), where he spoke about the Mozambican financial system and the contribution of the capital market.

On the occasion, Salim Valá referred that his institution envisages making the Financial System (FS) an effective financing instrument of the real economy, mainly for SMEs.

“The FS, in the face of the adverse global and national scenario, faces difficulties in fulfilling its traditional role of financing the economy,” he said, and then pointed out that “for this, alternative and innovative financing instruments are needed, such as the Capital Market, the BVM, the Sovereign Fund and Venture Capital Funds/Mutual Guarantees.”

The head of BVM said that the institution he heads “aims to expand the scope and impact of the Capital Market (CM) as an alternative financing instrument for the economy and implement bold and transformative reforms to strengthen the CM and BVM.

On the occasion, the source referred to the necessary conditions for the development of the Capital Markets (CM), having highlighted that “good macroeconomic and policy framework and stability are essential conditions to attract foreign investors and to minimise interest rate volatility. Also strong institutions and an efficient legal system are critical factors for the development of the CM to attract a large number of investors and companies to the stock market, as macro policy stability and a strong institutional environment are not enough. A good financial infrastructure to facilitate trading and information exchange in the markets and a broad investor base are needed to ensure market depth and liquidity. If small, the entry of foreign investors should be encouraged. In addition, pension and investment funds are also essential for market size”.

What is the financial system?

According to the Mozambique Stock Exchange, the financial system is a set of financial institutions, regulators and economic agents that operate in the economy of a country. Their purpose is to intermediate savings and investment, capturing resources and directing them to productive projects.


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