Launched 2013
While economic growth increased significantly in recent years in Mozambique, it has largely been driven by natural resource ‘mega-projects’ that make limited use of the domestic marketplace, and therefore have not had an impact on poverty reduction. At the same time, SMEs, which create up to 86% of jobs in developing and frontier economies, lack access to formal credit, which has greatly inhibited their ability to compete for opportunities emerging in the Mozambican market.
Building Markets launched its A2F program to provide a crucial linkage between local firms and finance providers in Mozambique.
- 362
Businesses
Verified - 255
Businesses
Trained - $ 12,504,564
Contracts
Facilitated
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Country Context
Population: 29 million (World Bank, 2014)
Languages: Portuguese (Official), Swahili, Makhuwa
Monetary unit: Mozambiqua metical (MZN)
Main exports: Aluminum, prawns, cashews, cotton, sugar, citrus, timber; bulk electricity
GNI per capita: US $630 (World Bank, 2014)
ODA received: $3.9 billion (World Bank, 2013)
Human Development Index ranking: 185/187 (UN, 2014)
Estimated GDP growth: 7.4% (World Bank, 2014)
Twenty years after a brutal civil war that left one million people dead and five million displaced, more than half of Mozambique’s people still live below the poverty line. The recent macro-economic growth in Mozambique has not been inclusive, and the promise of broad-based, private-sector-led economic and social development is not being realized. The vast majority of Mozambicans work in subsistence agriculture and in informal or non-competitive, low skilled services sectors. With limited formal-sector jobs on offer, the 9-million-strong labor force is growing rapidly as the country’s young population (45% are under 15) matures and those benefitting from expanded access to secondary education seek employment.
The Mozambican labor force is expected to increase by more than 300,000 per year, to 15 million in 2030 and 20 million in 2040. This calls for effective strategies that would ensure that the private sector is geared to absorb this human capital as it comes into the marketplace.
Products & Services in Mozambique
- Business Verification
- Training
- Credit Advisory
- Credit Facilitation
Bringing Visibility to Local Firms and Markets
Building Markets has built a network of over 800 SMEs in the country, 53% of which are owned or managed by women. This information helps connect local businesses to new opportunities, identifies trends and challenges, and informs the design and development of services and partnerships:
- Hosted regular information and networking events to create an opportunity for SMEs to meet with banks, government officials, and other stakeholders in SME finance;
- Partnered with 8 banks in Mozambique to advocate for the creation of products and services that will bridge the gap in access to finance for SMEs;
- Researched and published the Demand and Opportunity Assessment and Analysis of business linkages in Mozambique;
- Helped SMEs access $12.5 million USD in new credit.
Building Capacity
Building Markets provides training to SMEs to enhance their management capacity in areas such as business planning, customer service, marketing, financial management, record keeping, and procurement. Credit advisory services are also offered to help SMEs through the loan application cycle.
- Over 500 SME attended a training session during the program. Finance training courses have also been attended by bank staff looking to increase their technical knowledge;
- All training sessions include modules with information about gender equality and environmental sustainability;
- Specific credit advisory services include preparation of credit motivations, performing independent monitoring of borrowers to ensure compliance, and providing on-going advisory through life of the loan.
Connecting Local SMEs to Financial Services
Through our local and international partnerships, Building Markets arranges and puts in place financial instruments, such as credit guarantees, that improve the risk profile of qualifying businesses:
- Negotiated facilities with banks and assisted SMEs in submitting 81 loan applications;
- Partnered with Thembani International Guarantee Fund, which has resulted in over $4 million USD in guarantees to SMEs applying for credit;
- Partnered with Instituto para Promoção de Pequenas e Médias Empresas (IPEME), the government agency responsible for SME development.
Women Entrepreneurs are Key to Market Success
Women are a vital component to the success of a country’s economic development and this is particularly the case in Mozambique, where women account for over 87% of the labor force in agriculture.
- 53% of the SMEs in our network are owned or managed by women;
- In addition to events for the general SME public, events have also been hosted specifically for female entrepreneurs to provide more targeted support to this group;
- 40% of the loans approved under the program have been for businesses owned or managed by women.
