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Cabo Delgado: GAPI, USAID and Government Launch $4.5M Resilience Fund to Support MSMEs

Cabo Delgado: GAPI, USAID and Government Launch $4.5M Resilience Fund to Support MSMEs

GAPI, the financial institution for the development of Mozambique, in partnership with the United States Agency for International Development (USAID) and with the support of the Government, launched this Wednesday, March 8, in Pemba, Cabo Delgado, the Resilience Fund for Micro, Small and Medium Enterprises, with a value of 4.5 million dollars.

This is a fund that aims to leverage the existing capacity of GAPI for financial intermediation and technical assistance to address the credit constraints affecting MSMEs. The instrument aims to make around 2700 financings, 700 of which are direct and 2000 indirect, that will assist around 680 MSMEs and increase jobs by 20%.

“The creation of this fund is one of the answers that the business community, especially women and young people, needs. The resilience fund seeks to constitute a vehicle for sustainable growth through the supply of credit with technical assistance for micro, small and medium enterprises,” explained Rafaela Uaiene, president of the Board of Directors (PCA) of GAPI. She continued: “this financial instrument that counts with the co-financing of four million dollars from USAID and 500 thousand dollars from GAPI is aimed at recovering economic activity and job recovery in the regions affected by cyclones and the covid-19 pandemic”.

The USAID official said the programme was developed by his organisation in partnership with GAPI, and will last two and a half years. But he hopes that after this time the implementation of the programme will continue.

For the private sector in Cabo Delgado province there is a need for more funding to train entrepreneurs on business management matters.

“In the view of the Provincial Business Council (CEP), there is a need to include funding for training in matters of entrepreneurship and business management for economic agents that may boost individual entrepreneurial skills, thus ensuring that they make contributions with responsibility and business posture,” said Mamudo Iragy, president of the Provincial Business Council.

The fund applies relatively low interest rates compared to those of commercial banks, making it very accessible. For youth and women MSMEs, the interest rates range from 9% to 12%, for society/individual MSMEs they will be between 12% and 15% and for microfinance institutions they will be 10%.

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