Maputo, Mozambique, 28 Dec – Banco Millennium bim signed an accord Thursday in Maputo with the Support Fund to Rehabilitation of the Economy (FARE) to expand its banking activities to the districts of Mafambisse in Sofala province and Namialo in Nampula province.
FARE is a government program that aims, among other things, to extend Mozambique’s financial services network to rural areas. It has granted Millennium bim US$ 1.050 million to cover the initial costs of its expansion into the two districts.
The chairman of FARE’s management board, Martinho Fernandes, told the Noticias newspaper that the accord had been made as part of a public tender recently launched by the government body to select financial institutions eligible for funding to expand their activities into regions without financial services.
Fernandes also said that 26 institutions applied in the first stage of the process, with seven of these being short-listed after evaluation of areas including history and capacity, rationality of their businesses and capacity to manage and monitor risk.
“Besides Millennium bim, we’ve already signed accords with Parapato, which will extend its services to the district of Angónia, and an accord with Kulima. More deals with the same objectives will follow,” added Fernandes.
Millennium bim could also reach agreement with FARE to widen its activities to the districts of Milange (Tete), Buzi (Sofala), Angoche, Monapo and Ilha de Moçambique (Nampula), Montepuez (Cabo Delgado), Mocuba (Zambezia), Chibuto and Manjacaze (Gaza).
Fernandes said FARE is being funded by the Maputo government, the African Development Bank (ADB) and the International Fund for Agricultural Development (IFAD). The support program for rural financial services was created in 2003 and has already benefited 15 financial institutions.
FARE’s chairman said another aim of the program, which runs until 2012, is to bring 125,000 new customers into the banking system, boost rural savings with the creation of 1,000 new community-based financial associations with around 30,000 members, improve the climate for expansion of financial services and increase the numbers of companies generating receipts on rural areas, as well as augment business volume and production in farming, cattle rearing and fisheries. (macauhub)