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Mozambique: Infrastructures Needed to Propel Rural Finance
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Agencia de Informacao de Mocambique (Maputo)
13 May 2008
Posted to the web 13 May 2008
Maputo
Developing rural financial services in Africa depends on infrastructures to link rural residents to financial institutions and to markets, stressed an African Development Bank (ADB) Consultant, Zeinab El Bakri, speaking in Maputo on Monday.
What was required, she added, were not only roads and reliable telecommunications, but also physical banks themselves, that would make credit more accessible to people in the rural areas.
El-Bakri was speaking at a seminar on 'Rural Financial Mechanisms in Africa', at which delegates from China's People's Bank (the central bank) and Agricultural Bank presented the Chinese experience in this area. This is one of a series of events preceding the ADB's annual meeting, which will take place in Maputo on Wednesday and Thursday
The ADB consultant warned that, although rural finance should be a key part of the economy in developing countries, there has been a significant decline in funds for this area in recent years.
"This decline is the result of bad performance and lack of commitment, both from governments and from donors", she said.
Other reasons for this failure included "poor investment in the rural areas, the poor design of projects and development programmes, and poor knowledge of financial markets'.
To change this scenario, she suggested that the ADB should promote rural credit in Africa not only through the creation of infrastructures, but also through the establishment of strategic partnerships.
"Taking measures to mitigate the negative effects of financial risks in Africa is also necessary in order to redirect finances to the areas of agriculture, small companies, rural water infrastructures, energy and other utilities", she said.
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