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Government Sets Up $120M Mutual Guarantee Fund for SMEs

Government Sets Up $120M Mutual Guarantee Fund for SMEs

The government is finalising the launch of the Mutual Guarantee Fund, financed with 120 million dollars, to enable credit lines for Mozambican small and medium-sized enterprises (SMEs).

According to the report on the 2023 Economic and Social Plan and State Budget, the proposal for the decree creating the fund is being finalised for subsequent submission to the Council of Ministers for approval. The preparation of the business plan for its operationalisation is also being completed.

According to the document released on Wednesday (28) by the Ministry of Economy and Finance (MEF), the intention to create the Loan Guarantee Fund was approved in April last year, after being proposed by the World Bank, which is financing it with 120 million dollars under the “More Opportunities” project, valued at 300 million dollars.

“The amount will be channelled to SMEs in selected sectors, so that they can access lines of credit that will enable them to leverage their businesses,” explains the MEF, clarifying the conclusion of “a feasibility study that has already been presented to the country’s main banks”.

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The authorities add that “an exercise was also carried out in the reference markets of Brazil, Cape Verde and Portugal, with the aim of improving the operational aspects of the fund and its viability based on concrete cases”.

Last year, the Minister of Economy and Finance, Max Tonela, explained that the aim of the Loan Guarantee Fund is to enable the national banks to make financial resources available to strengthen investment capacity at interest rates that are “more accessible to Micro, Small and Medium Enterprises operating in the Agriculture, Fish Farming, Agricultural Trade and Processing, Tourism and Housing sectors”.



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