Mozambique: Germany funds expansion of financial services in rural areas

5 December 2008

Maputo, Mozambique, 5 Dec – The Bank of Mozambique Tuesday in Maputo formally launched the Access to Finance Challenge Fund (AFCF) to fund activities to expand financial services in rural areas of Mozambique.

The Access to Finance Challenge Fund is the result of a contract signed in December 2007 by the Mozambican and German governments, worth 1 million euros, to co-fund activities to expand banking services.

As part of the fund, Germany’s “Kreditanstalt für Wiederaufbau” (KfW-Entwicklungsbank) plans to pay out 850,000 euros, to which Mozambican retail banks, micro-credit institutions and financial institutions will have access to expand their services to rural areas.

Joana David, director of the Bank of Mozambique, said that the Fund would finance growth of coverage, by setting up more banking institutions in rural locations, as well as providing new banking products tailored to the reality of those areas.

“The fundamental aim is to support micro-credit solutions, that is rural funding, because we all know that isolated areas of the country still have no coverage in terms of banking services,” David said.

The country’s banking service covers only 10 percent of an estimated population of just over 20 million and most of the Mozambican population lives in rural areas, where these services are rare.

The formal launch of the Fund is also the start of the period to receive proposals at the project implementation unit from all interested parties, the deadline for which is 12 February, 2009.

After the phase of collecting proposals, an assessment commission created for the purpose will meticulously assess the content of the proposals that have been handed in and those that have been approved will be announced at a later date. (macauhub)