Banks Open USD 150 Million Credit Line with Subsidised Interest Rates

- Muslim entrepreneurs do not apply for financing due to variable interest rates

- Protests have already caused losses of 32 billion meticais, around 3% of GDP

By Aurélio Muianga

Maputo (MOZTIMES) – Commercial banks affiliated with the Mozambican Banking Association (AMB) will provide a credit line of 10 billion meticais (approximately USD 150 million) between March and September this year to finance working capital and investment for companies affected by post-election protests.

The financing is part of the government's economic recovery measures aimed at ensuring the sustainability of Micro, Small and Medium-sized Enterprises (MSMEs), but also includes large companies that have been directly impacted by the protests, employ up to 100 workers, and have an annual turnover not exceeding 160 million meticais.

The loan repayment period is up to 12 months for working capital financing and can be extended to five years for investment purposes.

The interest rate applied to borrowers will be fixed at 15% for the first year of the loan term and will become variable from the second year onwards, in line with prevailing banking interest rates, but with a 4% discount, explained AMB President Teotónio Comiche during the launch of the credit line last Friday in Maputo.

Beneficiary companies will be exempt from credit processing fees, which usually account for up to 10% of the total loan amount. Each company may access a maximum of 20 million meticais, and to be eligible, it must have its tax obligations in order.

According to the President of the Confederation of Mozambican Business Associations (CTA), Agostinho Vuma, the protests that have been taking place across the country since the October elections have already caused losses amounting to 32 billion meticais, equivalent to approximately 3% of GDP. "If the situation persists until the end of the year, the country could lose one-third of its economy," Vuma warned.

Meanwhile, Muhammad Abdullah, Executive Director of COTUR, one of Mozambique's largest travel agencies, stated that Muslim entrepreneurs would not take up the credit, as their religion does not allow them to "engage with bank loans that have variable interest rates."

He explained that Islam prohibits the granting or contracting of loans with variable interest rates. "However, we can accept financing with fixed and structured interest rates throughout the loan term," Abdullah clarified.

Speaking at the event, Finance Minister Carla Louveira presented data showing the negative impact of the post-election crisis on the economy. According to the minister, the secondary sector has been the most affected, recording a decline of 8.9%, with manufacturing industry experiencing an 11% decline due to the vandalisation of 19 factories and industrial units.

The primary sector has also suffered significant setbacks, registering a fall of 4.8%, particularly in the extractive industry, which saw a 10.1% decline.

The tertiary sector contracted by 3.8%, mainly driven by the Hotels and Restaurants segment, which recorded a collapse of 14.7%, and the Trade and Repair Services sector, which saw a 10.6% drop due to the destruction of 23 warehouses and 1,677 retail establishments. (AM)

Chapo Reaffirms Commitment to APRM

Chapo: One Year Trying to Get the Country Back on Track

Civil Society Leaders Concerned About Government Interference in NGO Operations

Police Deny Shooting at Mondlane’s motorcade

Rwanda’s Involvement in the Congo War Does Not Affect European Union Funding in Cabo Delgado

Chapo Wants Natural Resources to Serve the Country’s Development

Toll Gates Set on Fire in New Wave of Protests

Private Residence of Mayor of Manhiça Set on Fire

Venâncio Mondlane Reaffirms Willingness for Dialogue with Chapo

Trending Tags

Chapo Reaffirms Commitment to APRM

Chapo: One Year Trying to Get the Country Back on Track

Civil Society Leaders Concerned About Government Interference in NGO Operations

Police Deny Shooting at Mondlane’s motorcade

Rwanda’s Involvement in the Congo War Does Not Affect European Union Funding in Cabo Delgado

Chapo Wants Natural Resources to Serve the Country’s Development

Toll Gates Set on Fire in New Wave of Protests

Private Residence of Mayor of Manhiça Set on Fire

Venâncio Mondlane Reaffirms Willingness for Dialogue with Chapo

Trending Tags

Banks Open USD 150 Million Credit Line with Subsidised Interest Rates

REVIMO Suspends 380 Workers Due to Tollgate Destruction

“Since 1994, Every Time Elections End, There is Destabilisation” – Daniel Chapo

"Since 1994, Every Time Elections End, There is Destabilisation" – Daniel Chapo

Search by categories

Category

Recent Posts

Welcome Back!

Retrieve your password

Add New Playlist

Are you sure want to unlock this post?

Are you sure want to cancel subscription?

Trending Tags

Trending Tags

Banks Open USD 150 Million Credit Line with Subsidised Interest Rates

Support authors and subscribe to content

Subscribe

Desbloquear

REVIMO Suspends 380 Workers Due to Tollgate Destruction

“Since 1994, Every Time Elections End, There is Destabilisation” – Daniel Chapo

Search by categories

Search from tags

Category

Recent Posts

Welcome Back!

Retrieve your password

Add New Playlist

Are you sure want to unlock this post?

Are you sure want to cancel subscription?