We met Mr. Changamo at the fifth national Microfinance conference in Matola where he told us that Caixa Communitária (Community Saving and Credit Organization) has 13.000 customers in three provinces; in Cabo Delgado in the North and in Maputo and Gaza in the South.

The majority of his customers are farmers who are granted group credits to boost agricultural productivity. In the North, where the farming is mostly rain-fed, the loans are used for manual cultivation costs; and in the South for various purposes, for providing seeds, fertilizer, pesticides, and for paying salaries. With seasonal workforce and various purchases the farmers are able increase the cultivated area, increase yields and income.

Mr. Changamo admits that repayment risk is one of the obstacles in developing small-scale financial services in Mozambique. “We just need to work harder, to make better business plans, adjust the credit amounts, rely more on group-solidarity, and even cooperate with the traditional leaders of the communities”, he lists.

Despite the recent growth of the financial sector in Mozambique, financial services are still not comprehensive enough. Including commercial banks and microfinance institutions, only 24 percent of the population has access to financial services. Majority of the population, living in rural areas, have no access to these services and products. For example, more than half of the 128 districts of the country have no bank.

UNDP's vision: an effective financial sector could remarkably contribute to combating poverty

“Our vision is that an effective financial sector could remarkably contribute to combating poverty and hunger in Mozambique, and for that the financial sector must be inclusive and comprehensive. It must cover and benefit the whole population including especially the young and women that are often among the poorest and most vulnerable population groups”, stressed UNDP’s acting Resident Representative Jocelyn Mason in his vision presentation.

In our view, said Mr. Mason, appropriate financial service for the poor and vulnerable are the microfinance services, such as deposits, loans, payment services, money transfers, and insurances. “Microfinance should not be construed as a kind of charity but as a way to extend the same rights and services to low-income households that are available to any other citizen.”

According to Mason, access to financial services can be a critical element for poverty reduction in Mozambique. “Improved access and efficient provision of savings, credit and insurance facilities can allow the poor to moderate their consumption, manage their risks better, build their assets gradually, develop microenterprises, increase their capacity income and enjoy a better quality of life. The microfinance services can also contribute to improving resource allocation, promotion of markets and adoption of improved technologies”, he stated.

In his statement, the Governor of the Bank of Mozambique Ernesto Gove proposed that there should be common IT platform for all the microcredit institutions and their accounts that would be overseen the central bank. “This would reduce the costs and risks of the microcredit service providers”, he explained.

In Mozambique, there are 17 banks and 34 microcredit institutions that have some 300.000 customers.

Further information:

UNDP in partnership with the Capital Development Fund United Nations (UNCDF) is promoting greater access to financial services and products for small businesses through the joint programme called Building Inclusive Finance Services in Mozambique (BISFMO).

UNDP's vision on microfinance in Mozambique was covered byt the daily Notícias, in its "Economia & Negocios" supplement