As part of the search for solutions to enable local content in large projects in Mozambique, Absa Bank Mozambique is in the process of forming partnerships with development financial institutions to create risk sharing programs in the financing of Small and Medium National Enterprises.
The information was advanced recently, in Maputo, by the Director of Oil and Gas of Absa Bank Mozambique, Hermano Juvane, during a debate organized by the portal Local Content, under the theme “Financing Solutions for Small and Medium Enterprises in Mozambique”.
“Some of these financing that we envision, have beneficial rates for SMEs led by women. In addition, we have a financing solution called ‘Vanila’, which we grant when a client presents a contract from a large company and one of the points that increases the advantage is when the SME has extensive experience in delivering certain goods and services,” said Juvane.
According to the manager, access to financing is the main challenge that Mozambican SMEs face when supplying goods and services to large projects and large companies, and the ‘Vanila’ financing model has established some facilities, in that it does not require collateral and is positioned as a payment accelerator.
“The requirement of the ability to offer collateral to banks has been a major barrier for small and medium enterprises and the removal of these collateral was one of the solutions that Absa Bank Mozambique, at the group level, found viable.
In practice, when a SME is hired by a large company such as Total or Exxon Mobil, the way the bank looks at it changes somehow”, he explained.
Another issue of great concern, for Juvane, is the fact that a large part of the national SMEs are not certified with international quality standards.
“We have few national entities with certification to be able to provide goods and services of high quality level, many of the SMEs do not have an organized financial management, which is one of the aspects that the credit committee of the banking sector analyzes. It is a big factor that influences the level of confidence that the banking institution has for the medium company”, he warns.
Given this scenario, Absa Bank Mozambique has been carrying out institutional capacity building actions, aiming at improvements in the Mozambican business fabric.
“We are partners of MozUp, which has a training center in Maputo, belonging to the Area 4 partners, led by Exxon Mobil and this somehow conveys some confidence that the multinational Mobil has long term plans here in Mozambique, since they present a training program for about a thousand national companies in the next 4 years”, he concluded.
