The Mozambique Cereals Institute (ICM) and Gapi have approved a program to mobilize additional resources to strengthen the Agricultural Commercialization Credit Line (LCCA), an instrument that, since its creation in December 2018, has already financed 260 operations for a cumulative amount of 374 million meticais.
In 2021, the LCCA financed the purchase from family farmers of 93,300 tons of various products.
"Given the results achieved so far and the growth in capacity and demand from family farmers and rural traders, it is important that for this campaign we are able to strengthen the LCCA with an additional 100 million meticais," said LCCA Finance Director Amiro Abdula.
"This instrument has had a positive impact on local economies and the rigor in its management ensures that this credit portfolio is with a low rate of delay, in the order of 7%, and the compliance rate in credit repayment stands at 93%. Considering the risks of this sector and the target group, these indicators demonstrate the seriousness and professionalism of the ICM-Gapi partnership," added Amiro.
Of the 260 credit operations financed, 13% were for agro-processing and 87% for agricultural marketing.
About 40% of these operations benefited companies owned by young people. According to a joint report of the two institutions, "these percentages, remind us of the need to encourage young people to opt for entrepreneurship, more specifically to embrace the area of agricultural marketing, as a way to increase the income of their families.
The northern region of the country absorbed 65% of the total amount financed by LCCA. Corn, beans, sesame, soybeans, peas, peanuts, cashew nuts, rice, and dried cassava are the products most purchased by rural traders.
"Despite the difficulties imposed by the Covid-19 pandemic and scarce resources, the LCCA, achieved an increase of about 41% of jobs created/generated in 2021 compared to the cumulative to 2020," reads the document, adding that "in effect, 982 new jobs were created, of which 361 were women and 621 men. Therefore, the LCCA has so far enabled the creation and/or maintenance of 1567 jobs, mostly in rural areas."
It should be noted that the LCCA was created to finance agricultural marketing, as well as agro-processing activities, with priority for regions where farmers have more difficulty in accessing markets. The partnership between ICM and Gapi has also promoted investments for the expansion and modernization of storage, conservation, and processing infrastructures for the commercialized goods.