Societé Generale Mozambique subscribes to the Gapi’s Agro-Garante Fund

Societé Generale Mozambique subscribes to the Gapi’s Agro-Garante Fund

Gapi-Si and Societé Generale Mozambique, SA signed an agreement which formalized the bank’s adhesion to the Credit Guarantee Fund “Agro-Garante”.

The Societé Generale Mozambique bank, with this agreement, will now have this risk reduction instrument available to finance its clients operating in the Agribusiness value chains. At the time of signing, the representative of this entity, namely its Chief Financial Officer (CFO), Tomás Araújo Chale, considered that “Guarantees are considered in our bank during the process of analysis and evaluation of credit risk and will certainly reflect in the reduction of customer interest rates“.

In its turn, the Gapi’s CEO, António Souto, said that the adhesion of Societé Generale to Agro-Garante symbolizes the success of this fund and, however, as Development Financial Institution, “Gapi contributes through this and other instruments to make financing for SMEs more accessible”.

This Credit Guarantee Fund is the result of a tripartite agreement between the Governments of Mozambique, the Kingdom of Denmark and Gapi-SI in order to improve access to bank loans and investments by companies related to the agribusiness. Gapi was given the responsibility of designing and implementing a guarantee system, which came to be called Agro-Garante. In 2013, in cooperation with the Mozambican Association of Banks, several credit institutions subscribe to the system.

Since its operationalization, Agro-Garante, which has eight subscribing banks, has already guaranteed 230 Million Meticais (almost US$ 4 000 000) in bank loans to more than 90 Small and Medium Enterprises (SMEs), which has enabled more than 5,000 jobs to be secured.

In the scope of the Agro-Garante, Gapi grants to the subscribing banks guarantees in proportions ranging from 20% to 70%, the amounts of these operations varying between 750,000 Meticais (US$ 12 500) and 15 Million Meticais (US$ 250 000), with the ceiling foreseeing soon to 20 Million Meticais (more than US$ 300 000).

Gapi’s experience and success in the design and management of Agro-Garante has earned it the confidence of other entities, namely from the World Bank and MITADER (Ministry of Land, Environment and Rural Development) that through a tender international, it was selected to manage and implement a new Guarantee Instrument for Small and Medium Enterprises.

This new credit guarantee fund is part of the financial instruments of the Sustenta Program, which covers several districts of Nampula and Zambézia provinces, initially earmarked for a little over 120 Million Meticais (US$ 2 000 000). The start of implementation only awaits contractors’ disengagement.

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