President Daniel Chapo has launched the Local Economic Development Fund (FDEL) in Inhambane Province, with a value of 960 million meticais (approximately 15 million dollars). The fund aims to support entrepreneurial initiatives led by youth and women across the country. During the launch ceremony, the Head of State stressed that beneficiaries who fail to repay their loans will face strict penalties, including the cancellation of financial support and exclusion from future public funding opportunities.
“If we don’t repay, the Government will not be able to support more Mozambicans who want to start businesses, earn income, and create jobs for their fellow citizens. Those who fail to repay and cannot justify it will be penalized,” said Chapo.
The first funded projects are expected to start in September, with repayment being mandatory, as “the State does not have unlimited funds and therefore they must be used wisely,” the President emphasized. To ensure transparency and fairness in the allocation of funds, a selection committee will be created, composed of government members, civil society, academics, and economic agents. This committee will be responsible for approving only serious, viable projects, rejecting any based on favoritism or improper payments.
The fund’s regulations set an interest rate of 5% on the financed amounts and require a detailed repayment plan, including clear instructions on amounts, deadlines, and monthly deposits into a designated account until full repayment.
FDEL excludes financing for activities such as the production and sale of alcoholic beverages, scholarships, and meetings that do not contribute to local economic development.
Created as part of the government’s first 100-day measures, the fund was initially allocated more than 960 million meticais (15 million dollars), as announced in February. In addition to the State Budget, the fund may also receive contributions from international partners, philanthropic institutions, and the private sector through corporate social responsibility.
The regulation further stipulates that at least 60% of FDEL’s resources will go toward funding individual or group initiatives by young people, while 40% will be directed to women-led economic projects at the district and municipal levels.
The fund will be managed in partnership with district governments, municipal councils, cooperatives, and local financial institutions, to ensure financial support is delivered quickly and transparently to communities — especially in rural and semi-urban areas.
Priority sectors for funding include agriculture, agro-industry, local tourism, food processing, artisanal fishing, renewable energy, digital technologies, and local commerce — all considered essential for Mozambique’s sustainable economic development.
Source: Lusa
