Banking DFI Economy Finance Government SME

Mozambique credit line available for companies keeping jobs

Mozambican micro, small and medium companies can only access the lines of credit made available by the government through the National Investment Bank (BNI) to combat the effects of the Covid-19 pandemic, if they commit to maintaining existing jobs, and creating new ones.

The Chairperson of the BNI Executive Council, Tomas Matola, interviewed by AIM, said this is a crucial condition intended to stop the economy from haemorrhaging jobs. The credit available via the BNI, which is 100 per cent owned by the Mozambican state, amounts to MZN 1.6B (about US$22.8M).

“The Covid-19 line of credit has two goals”, said Matola. “One is short term and one is medium term. The short term goal is to maintain jobs, and recover losses, while the medium term goal is to increase productivity and generate new jobs”.

Matola believed that the BNI’s lines of credit are those most appropriate for Mozambican companies reeling from the effects of the current health crisis. He pointed out that the interest rates charged by the BNI are the lowest on the Mozambican market. The loans are intended to revive the micro, small and medium enterprises and improve their operations.

Also read: Mozambique’s COVID19 SME credit lines: BNI press conference

“These lines of credit”, he added, “fit into the search for financial solutions that are adjusted to the risk profile and return of companies, and to the moment the companies are living through”.

Of the total amount available, a billion meticais has been disbursed by the government and 600 million meticais comes from the BNI’s own funds. “The BNI negotiated financing with its partners, such as the National Social Security Institute (INSS) through the issuing of corporate bonds”, said Matola.

“The interest rates vary between seven and 12 per cent, depending on the risk of the projects”, he added.

Matola admitted that the total available via the BNI is very small when compared with the needs of the businesses suffering the impact of Covid-19. But it was a recognition by the government of the difficulties businesses are facing, and of the need to find solutions to cushion the impact of Covid-19 on companies.

“This effort by the government should be praised”, he declared.

Source: AIM via Club of Mozambique

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: