FEREN – Emergency Fund for Business Rehabilitation and Expansion, a financial facility organized by Gapi with the initial support of DANIDA, has already started financing operations for some companies whose activities were totally or partially destroyed by cyclones Idai and Kenneth. Under the institutional cooperation agreements between GAPI-SI and FARE, the financing of FEREN to support the recovery of the business affected by these calamities is made by the FARE – Economic Rehabilitation Support Fund.
The General Director of FARE, Augusto Isabel, travelled to the central region of the country to deliver the checks corresponding to the first four approved applications out of 24 that were already considered eligible.
In Sofala province the first two financings went to the Unipesca company based in Beira city, which is engaged in fishing, processing and marketing of marine products and Agro-Ana, which operates in the districts of Nhamatanda and Búzì, producing and commercializing sugarcane.
“This act reflects the efforts of national institutions, together with multinational strategic partners, to fulfil their mission of supporting the emergency, strengthening and development of national business in a sustainable and responsible manner” – said Augusto Isabel, Director General of FARE, in the act of handing over the first two checks in Sofala Province and symbolizing the operation of FEREN.
In Manica province, the first served by FEREN was the Só Aves poultry company, based in Gondola district. With the cyclone most of its pavilions, including those operating around Beira, were destroyed.
Ten more financings are in the process of being contracted and disbursed, including some Kenneth-affected Cabo Delgado companies.
The Recovery Line covers a maximum amount per transaction of 1,500,000 meticais, has an annual interest rate ranging from 8% to 10%, a maximum capital deferral period up to 180 days and a maximum repayment period up to 36 months. This line has the particularity of having an Incentive which consists in repaying 20% of the capital paid to borrowers who have fully met their obligations and operationalized their business and secured jobs.
Based on multi-donor agreements, Gapi has mobilized resources to finance national business development projects, taking responsibility for managing these resources in accordance with international standards in accountability processes. For the implementation of FEREN, this development finance institution has established partnership agreements with CTA and the Foundation for Business Environment Improvement (FAN).
The FEREN Management Unit informed its partners that the first contribution made by DANIDA is just over 52 million Meticais (over US$800,000), which is insufficient for the rehabilitation and relaunch needs for the companies already identified as eligible. In addition to these companies, FEREN is open to further contributions from more partners, having in the meantime begun to organize a specific program focusing on youth endeavours in disaster-stricken regions.