The Mozambique Guarantee Society (SGM) presented on Thursday (13), during the 20th Annual Conference of the Private Sector (CASP 2025), a new mechanism designed to transform the financing landscape for Mozambican micro, small and medium-sized enterprises (MSMEs). The initiative focuses on risk mitigation and improving the conditions for accessing bank credit.
According to the Further Africa portal, in her address, SGM’s chief executive, Beatriz Freitas, highlighted that the initiative represents a structural shift in how the national financial system manages the risk associated with the MSME segment. The proposed institutional model follows international best practices and seeks to address historic market failures that have, until now, severely limited financing to this sector.
Mozambique’s economy is largely composed of small business units, but access to credit remains constrained by rigid collateral requirements and a persistently high perception of risk among banking institutions. To reverse this scenario, the new credit guarantee mechanism will operate through partial guarantees on loans, sharing risk between banks and the guarantee fund.
“The market remains cautious, but by reducing the direct exposure of financial institutions, we create an enabling environment for them to grant credit to viable companies that would otherwise remain excluded,” said Beatriz Freitas.
SGM was designed with a robust governance structure, incorporating independent control mechanisms, transparent eligibility criteria and risk-management systems aligned with international standards. These elements aim to build trust among banks and ensure credible and sustainable operations in the medium and long term.
In addition to easing constraints posed by scarce collateral, short maturities and high financing costs, the new scheme intends to foster competition in the banking sector by expanding access to credit for strategic areas such as agriculture, agro-industry, renewable energy, transport, construction and tourism.
The expected impact goes beyond the mere facilitation of credit. With greater security for lenders, there is room for longer-term financing and tailored solutions for business investment, which could enable national companies to scale operations, create jobs and consolidate industrial value chains that are currently fragmented.
Alongside its economic objective, SGM is also aligned with the government’s strategy for financial inclusion and modernisation of the sector. The fund will support the expansion of digital risk-assessment tools, promoting a more equitable distribution of credit — including to rural areas, women entrepreneurs and young business owners.
The executive also stressed that transparency will be one of the institution’s hallmarks. SGM will regularly report performance indicators, portfolio composition and complaint-management processes, strengthening investor confidence and ensuring the effective use of public and private resources.
To achieve scale and long-lasting impact, close coordination between banks, companies and the guarantee fund will be essential. Despite the risks associated with this type of instrument, SGM ensures a system of continuous monitoring, allowing timely adjustments and promoting prudent growth.
“International experience shows that well-regulated schemes can multiply their capital into new credit operations. Our aim is to create a solid foundation that responsibly supports the expansion of the Mozambican private sector,” concluded Beatriz Freitas.
