Nampula, located in the Northeast of Mozambique, is the third largest city and the economic hub of the country’s north. Although the region has a sizable small and medium sized enterprise (SME) population, many cannot obtain much needed capital due to high interest rates and financially prohibitive loan processing fees. Furthermore, many SMEs are unaware of what financial services are available to them, and are unsure of how to approach banks. This means they are often left without the resources needed to improve their competitiveness, increase their size and expand to new markets. In a country like Mozambique, where poverty levels are extremely high, SMEs could play a unique role in creating jobs and livelihoods but unfortunately their inability to access bank credit prevents them from doing so.
Building Markets, eager to help SMEs in northern Mozambique address this problem, traveled to Nampula in late June to continue the launch of its Access to Finance program. In order to reach and introduce the greatest number of businesses to the organization, Building Markets held two events: a general Nampula launch event, and an event specifically for female entrepreneurs. At both functions, Building Markets was able to present its services and engage with SMEs to better understand the challenges they face in obtaining new financing.
Nampula Launch Event
The response and attendance at the event was even greater than anticipated with a total of 78 local businesses represented. SMEs heard presentations from financial service providers like Moza Banco, a local bank, and the financial cooperative MIRUKU, who both spoke about how their institutions target SMEs. Following the two presentations, Jaime Bila, the owner for JNB, a local agribusiness, shared his story and spoke about the challenge of high interests rates and how that has prevented him from accessing credit. Building Markets’ local partner, IPEME (The Institute for the Promotion of Small and Medium Enterprises), also spoke on its mission to serve Mozambican SMEs and on its objectives in Nampula. The event ended with an engaging two hour long discussion on the state of the local economy and opportunities and challenges SMEs face in the financing space.
“Today I learned a lot about business and how to access finance… [I] leave here with a more entrepreneurial mind and strength to do the best in my business.” – Naterica Arnaldo, the Finance Manager for a local savings and credit association.
Female Entrepreneurship Event
The female entrepreneurship event was also well attended, hosting 53 women from local cooperatives, associations, and individual businesses. These women represented various sectors, including traditionally male dominated industries such as carpentry, construction and metalworking. Access to financing was highlighted as one of the biggest challenges facing women-owned SMEs, as well as the lack of training and capacity building opportunities available in the region.
Among several highlights from the event was a presentation by local business woman, Ms. Anabele, who transformed her small restaurant into Rainha dos Frangos, a poultry farm that now raises approximately 22,000 chickens a month. She did this with the assistance of the local government’s District Development Fund.
After the presentations, participants spoke directly with three banks (BCI, Moza Banco and Banco Terra) in a small, group circle setting. The purpose of this was for the businesswomen to better understand services they might be able to access at these banks and for the banks to gain clarity on the constraints and needs of SMEs.
“I entered the room as just a woman, but I came out as a business woman. It was great, and all I learned I will put into practice.” – Administrator for Transporte Chefe Transporte, Manura Saide.
This event was one of the many ways Building Markets’ will be supporting SMEs in Nampula over the next year. The organization will also support businesses in three other ways: 1) through credit advisory services which will guide them in the preparation of competitive loan applications; 2) in working directly with banks to help facilitate the loan application process including helping them understand how they can tailor their services to include this unique, and profitable client segment; and 3) Building Markets will provide targeted training to SMEs to increase their competitiveness and capacity to access new financing options.
If you are interested in partnering with Building Markets, or are a local Mozambique SME looking to access finance, please contact us at Mozambique@buildingmarkets.org.
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