Good afternoon. Yesterday’s launch of a fund to provide loan guarantees for small and medium-sized enterprises (SMEs; see below) is a welcome development, although whether it actually benefits the sector is another matter. Such businesses struggle to get financing on affordable terms from banks, and are sometimes forced into dealing with more informal, ruthless loan sharks.
The full Daily Briefing continues below for Pro subscribers. Subscribers to the Zitamar News tier can read the top half, including the full leader article, here.
But access to finance is only one of the problems that SMEs face, and to some extent, the fact that they are often trying to borrow money reflects their wider problems. SMEs in Mozambique are fighting for life even before they are born. Starting a business is a slow and bureaucratic process, and, typically for Mozambique, requires paying bribes to public servants to get them to process paperwork. Once a business is set up, there is the challenge of running it. There is a shortage of qualified managers and accountants in Mozambique, and SMEs lack the funds to pay adequate wages to attract people with the qualifications to operate a business. There is also a lack of assistance from the government, which does not really provide much advice or support to help businesses grow and navigate their challenges.
