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Mozambique: Gapi Becomes 100 Per Cent National Partnership
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Agencia de Informacao de Mocambique (Maputo)
18 December 2007
Posted to the web 18 December 2007
Maputo
The German Friedrich Ebert Foundation (FES) on Tuesday sold its 30 per cent holding in the Mozambican financial institution GAPI (Small Scale Investment Support Office) to two major Mozambican NGOs, the Community Development Foundation (FDC) and the Mozambican Red Cross (CVM).
This converts GAPI into an organisation that is 100 per cent Mozambican. 30 per cent of its shares are held by the Mozambican government, 40 per cent by the private investment vehicle Gapi-Gest, set up by GAPI staff, 15 per cent by the FDC and 15 per cent by the CVM.
FES sold the shares at their face value of 1,000 meticais (about 40 US dollars each), plus a premium of 30 per cent. The total GAPI share capital is 41 million meticais. So in theory, each of the two NGOs should pay the FES 6.15 million meticais.
In fact, the FES has decided that all the money should be ploughed back into GAPI, plus the 30 per cent premium. The end result has been to strengthen GAPI's own finances by just under 16 million meticais.
GAPI's Chief Executive Office, Antonio Souto, praised the German foundation's gesture. He said the FES had shown its commitment to the strategy to convert GAPI into a development-oriented financial company, 100 per cent Mozambican owned, but as a "public-private partnership".
The alternative strategy, successfully resisted, had been to turn GAPI into just another minor commercial bank.
As a development-oriented financial company, a change in GAPI's status already approved by the Bank of Mozambique, Souto sees the institution as operating to catalyse the creation of a range of community-based and micro-finance bodies in the Mozambican countryside. "Our idea is to develop a network of institutions", he told AIM.
He disagreed with the conventional wisdom that all the countryside needed was an increased injection of financial services. That was just looking at the supply side, while Souto believed that "the real problem lies in demand".
This could be tackled by "working on human capital and institutional development, in order to improve business capacity and bankability in the countryside".
While GAPI will not become a bank itself, it is one of four partners setting up the country's first "bank with a rural focus". This new institution, the Banco Terra (Land Bank) should begin operations in early 2008. The shareholders are the Dutch Rabobank, with 30.7 per cent, GAPI (29.3 per cent), KfW of Germany (20 per cent), and Norfund of Norway (20 per cent).
GAPI has been in existence for 20 years. It started life with capital of just 70,000 US dollars, and has grown exponentially. The 2006 audited balance sheet put GAPI's total assets at slightly more than 465 million meticais (about 19 million US dollars), with total liabilities of 243 million meticais. It made a net profit of 1.9 million meticais in 2006.
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Souto saw the current transformation of GAPI as the culmination of 20 years of work. "These processes need a long term vision, if they are to have any chance of success", he remarked.
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| Copyright © 2007 Agencia de Informacao de Mocambique. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here. | |||||||||||||||||||||||||||||
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