In light of an agreement initialed this Tuesday, March 16, between the bank and Proparco, a French development agency, the focus will be on financing agribusiness and female entrepreneurship.
Good news for national companies in times of crisis! Proparco – a financial institution partially controlled by the French Development Agency (AFD) – has committed to share the risk of financing national Micro Small and Medium Enterprises (MSMEs) in the amount of three million euros (equivalent to more than 260 million meticais at the current exchange rate) through Société Générale, a financial institution that has been operating for five years in the Mozambican market.
The initiative, whose agreement was initialed this Tuesday, March 16, will allow the financing to reach the beneficiary companies under relatively easy accessibility conditions, especially with regard to interest rates.
The guarantee is also supported by the European Union, the European Development Fund and the African, Caribbean and Pacific Group of States (ACP), through the so-called EURIZ portfolio, and aims to facilitate access to credit for MSMEs, particularly in sectors with high development impact, in order to help them play their role in economic growth and job creation.
Tuesday’s agreement states that women-owned MSMEs and those active in the agricultural sector will be given particular priority. “Proparco is pleased to be able to count on a key partner like Société Générale Mozambique to support SMEs in a country where financial inclusion remains a huge challenge. By targeting women entrepreneurs and the agricultural sector, this project addresses important development challenges and will have a strong positive impact in Mozambique.” said Siby Diabira, Proparco’s Regional Director for Southern Africa.
The representative of Société Générale Mozambique, Sterghios Dassarecos, highlighted that “after five years operating in the Mozambican market, the bank reiterates its ambition to become a reference in the market, besides being an active partner in the development of local economy, supporting SMEs especially in the current context where these companies face difficulties resulting from the global pandemic crisis”.
Other support instruments
Also present at the ceremony, the French Ambassador to Mozambique, David Izzo, recalled that his country has already approved several support instruments to the African continent and that will cover Mozambique. The diplomat cited a strategic program called “Grow with Africa”, valued at four billion euros, also launched by Société Générale Group and which aims to increase support to SMEs, namely by increasing the Group’s credit to SMEs.
“This first operation between Société Générale Mozambique and the AFD Group further strengthens a historical relationship that unites us on the African continent. It is part of the French ‘Choose Africa’ initiative, which will allocate €3.5 billion to finance and support MSME start-ups on the continent over the period 2018-2022,” explained David Izzo.
More than two billion euros have already been committed by AFD and Proparco under the ‘Choose Africa’ initiative. According to the diplomat’s forecasts, more than 16,000 startups and SMEs, as well as tens of thousands of micro-entrepreneurs on the continent will benefit from this funding over the next few years.