Banks Announce Credit with Discounted Interest Rates for SMEs

- Approximately 40% of companies directly affected by the protests have outstanding bank loans

- Over 17,000 employment contracts have been terminated or suspended

Aurélio Muianga

Maputo (MOZTIMES) – The Secretary-General of the Commercial Banks Association (AMB), Elísio Langa, said in an interview with MOZTIMES that commercial banks have opened a USD10 million credit line to finance Small and Medium Enterprises (SMEs), and that the funds are already available.

According to Langa, the credit line features a discounted interest rate of 15% and represents the realisation of the immediate measures proposed last Thursday to President Daniel Chapo for the recovery of the national economy. The aim is to alleviate financial pressure and preserve employment in the context of electoral tension characterised by vandalism and looting.

"The credit will be provided exclusively by the 22 banks affiliated with this association. The criteria for granting loans have already been defined, but each bank will allocate funds according to the assessment of each applicant's debt risk," Langa explained.

The commercial banks also proposed measures to President Daniel Chapo to aid the recovery of companies and to mitigate the impacts of the protests.

According to data presented in the Economic Briefing, of the approximately 17,000 jobs affected by the protests, 5,200 are in the commerce and services sector, 4,300 are in hospitality and catering, and 4,000 are in industry.

For example, Merec Industries, a national leader in the production of maize flour and animal feed, with factories and silos in Maputo, Beira and Nacala, has about 500 permanent and seasonal workers affected by the protests and estimates the financial loss at USD 20 million.

Maeva Group, another prominent producer of oils and soaps, has recorded 600 employment contracts terminated or suspended.

Furthermore, according to data from the CTA, the protests jeopardise companies' ability to repay their debts due to the uncertainty over the resumption of activities.

"Approximately 40% of the companies in the sample have loans, and nearly 70% have no prospect of a short-term recovery," states the document on the impact of the protests on the business sector. (AM)

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