16 September 2008
Maputo — The International Finance Corporation (IFC), the private sector funding arm of the World Bank, has provided 8.5 million US dollars to support a loan facility for small and medium companies operated by Mozambique's second largest commercial bank, the BCI-Fomento.
The agreement on this fund was signed in Maputo on Tuesday by the chairperson of the BCI executive board, Ibraimo Ibraimo, and by James Scriven, the director of operations for the promotion of the private sector in Africa and Latin America of the IFC's Department of Global Financial Markets.
Ibraimo declared that the IFC's loan would make it possible for the BCI to increase the credit it is making available to small businesses from the current 75 million to around 84 million dollars a year. He hoped to see this sum rise to 200 million dollars a year within the next five years.
"Working with the IFC increases our capacity to fund small and medium undertakings which are a vital component of the Mozambican economy, and a key factor for sustainable economic growth", he said.
Ibraimo pledged that, as the implementing agency, the BCI will pay special attention to providing technical assistance to the beneficiaries of the loans. "It's not enough to give money - we must train people how to use it", he said.
He added that the BCI has been working with over 200 companies throughout the country, which are creating jobs, and thus contributing to the fight against absolute poverty and unemployment.
The loans, Ibraimo added, are open to all eligible small companies, and would carry the usual interest rates charged by Mozambican commercial banks. (These rates are high - last week, the spokesperson for the Bank of Mozambique, Waldemar de Sousa, told reporters that the average interest rates charged by the commercial banks are 20-21 per cent).
For his part, Scriven said "support for small and medium undertakings is a central part of the IFC's strategy to promote the private sector in Africa".
The IFC, he added, "hopes to show that small businesses are an attractive sector for loans from commercial banks".
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