The Minister of Finance and Economy of Mozambique, Adriano Maleiane, has said it is impossible for small and medium-sized enterprises to develop in the country with the current level of interest rates put in place by the banking sector, according to Maputo newspaper Noticias.
The minister, speaking at the launch of the 13th study on the banking sector in Mozambique, asked the bankers at the meeting to be more transparent in setting interest rates and to let people know that rates can be negotiated.
Maleiane also warned that current interest rates, of around 30%, have the potential to generate impairments in the balance sheets of banks, “which may affect the system as a whole.”
“The larger the impairments of a bank, the larger the provisions that will have to be established, causing a reduction in capital,” said the minister, adding he was convinced that what the banks want is to have customers that pay back their loans.
Maleiane gave assurances that the government will continue to manage fiscal policy in a way that does not undermine macroeconomic stability to ensure that interest rates may rapidly drop and, at the same time, look to stimulate the capital market.
The minister also said he would discuss with the Bank of Mozambique, the possibility of issuing and trading of Treasury Bills (debt securities with a maturity of up to a year) being transferred from the central bank to the Mozambique Stock Exchange.
Figures released at the meeting showed that credit to the Economy in 2016 fell by 25% compared to 2015 and that debt grew by around 66% in the same period.
Banco Comercial e de Investimentos became the largest by total assets, loans and deposits, overtaking Millennium bim, with the Standard Bank and Barclays Mozambique in third and fourth places.
Millennium bim remained the most profitable bank in Mozambique. (macauhub)