Mozambican micro, small and medium-sized enterprises (MSMEs) will now have access to credit through the recently created Loan Guarantee Fund, with an allocation of 4.4 billion meticais.

This fund, set up by the government, aims to "promote easier access to finance" for MSMEs, by "granting guarantees and counter-guarantees for loans taken out by this segment of companies" at national banks, in order to allow for "more accessible interest rates".

The public fund will be managed by credit institutions and financial companies, with a view to facilitating the granting of credit to MSMEs", as well as "counter-guarantees for the operations of mutual guarantee companies and other financial institutions dedicated to providing guarantees" to this business segment.

It also defines the objective of creating "conditions for the constitution, shared with credit institutions, financial companies or other financial institutions, of pledge and mortgage rights over the assets of the final beneficiary agents of the public guarantee, in order to ensure the sustainability" of the fund, and "support for expanding the supply and dissemination of legal instruments that can contribute to improving access to financing for MSMEs", according to Radio Mocambique.

The Fund will be supervised by the Bank of Mozambique, as stipulated in the law.

The aim of the fund, explained Economy and Finance Minister Max Tonela at the time, is to enable the national bank to provide financial resources to strengthen investment capacity at interest rates that are "more accessible to micro, small and medium-sized companies operating in the agriculture, fish farming, agricultural marketing and processing, tourism and housing sectors".