Improving framework conditions in the private sector

Context

Mozambique is one of the world’s poorest countries. The income of more than half of the people living in rural areas is below the poverty line. Almost 99 per cent of all companies in Mozambique are micro, small and medium-sized enterprises (MSMEs). Many operate on an informal basis and are unable to create sufficient jobs or provide the people with adequate goods and services. This is due to unfavourable economic conditions, inadequate access to financial services and insufficient involvement of these companies in value chains.

Objective

MSMEs take advantage of better framework conditions for growth that benefits all sections of the population. As a result, employment in Mozambique increases, incomes rise and poverty is reduced.

Approach

The project comprises three fields of action:

1. Together with the Mozambique Ministry of Industry and Trade and other governmental and private-sector implementation partners, the project supports reforms that improve the business climate and the range of public services available to MSMEs.
2. The project promotes inclusive business models through development partnerships with numerous national and international companies, with the aim of integrating MSMEs into their supply chains and improving services. The concept of inclusive business models is disseminated through national networks.
3. By supporting the country’s central bank, its banking association and selected financial service providers, the project improves the range of services provided by the formal financial system, particularly for women. It focuses on the development of innovative financial products and distribution models for MSMEs in rural areas.

Implementation of these measures is supported by the consulting firms AFCI and Como/Mierke Investment. In 2019, European Union funding enabled the project to expand its activities to Nampula and Zambezia in addition to the previous provinces of Inhambane, Sofala and Manica.

Last update: December 2021