Limited access to financial services is a key constraint of rural micro and small women and men entrepreneurs (including farmers) to develop their business and to generate employment and income. The Swiss supported Banco Futuro is successfully providing affordable financial services to rural entrepreneurs (80% women), thus allowing them to enhance business and livelihood opportunities
Employment & economic development
Agriculture & food security
Business support & economic inclusion
- Foreign private sector South/East
|Background||Despite the efforts to improve financial inclusion in Mozambique, vulnerable segments of the population continue to be broadly excluded (46%). There is still need for products that are specifically tailored to the financial needs of the poor. In 2017, SDC supported the creation of Futuro Microbank and is currently the majority shareholder (63%), while Hollard Insurance (the second largest insurance company in South Africa) owns 35%. The objective of the bank is to promote access to financial services to unbanked low-income households, farmers and traders in the northern province of Nampula. Switzerland has done pioneering work in supporting this bank, which bundles products (savings, credit and insurance) and services (financial literacy and business skills training) to empower micro and small entrepreneurs (mainly women) to take ownership of their investments, help families open and sustain their businesses, get better access to health and education and prepare/respond to different shocks. As the bank enters the consolidation and expansion phase, SDC’s continued engagement is crucial to ensure that social development outcomes continue to be a priority. Furthermore, flexible funding is needed to enable innovation, product development and capacity building to make that growth sustainable. SDC is best placed to provide this support. Through this Credit Proposal, SDC proposes a new phase with funding for Technical Assistance until 2023, when the bank is expected to have increased its operational self-sufficiency, reaching full break-even.|
|Objectives||Increased income of rural and urban poor in the northern province of Nampula, by promoting their financial inclusion.|
- Futuro Bank, as direct beneficiary, which receives technical assistance to enable capacity building, technological improvements and product development; and other indirect beneficiaries, such as the Mozambican association of Microfinance Operators which will benefit from increased policy dialogue.
- Micro, small and medium entrepreneurs (smallholder farmers, formal and informal traders, street vendors, welders, carpenters, tailors, etc.) from the urban and rural areas of the Province of Nampula (60% women), benefiting from increased access to financial services and financial and business skills training.
- Low income rural and urban men and women, including farmers and micro, small and medium entrepreneurs have increased access to affordable financial services, including loans, savings and micro insurance;
- Low income rural and urban men and women, including farmers and micro, small and medium entrepreneurs, improve their financial and business skills, supporting their sustainable business growth;
- Futuro Bank improves profitability and outreach and continues to serve low income rural and urban men and women sustainably).
- Development of formal financial products relevant for the needs of the poor (e.g. agriculture insurance);
- Design and delivery of structured financial and business skills training to 4500 beneficiaries (80% women);
- Enhanced outreach to rural areas outside Nampula city centre;
- Increased capacity of Futuro operational staff, middle management and improve banking expertise in the Board of Directors;
- Increased operational self-sufficiency, reaching breakeven including management costs by 2023.
Results from previous phases:
- Around 21’000 low income rural small scale men and women entrepreneurs (80%), incl. farmers, benefited of access to affordable commercial financial services (loans, savings, insurance) permitting them to enhance their business and livelihood opportunities, from 2017 to 2020.
- Delivery of financial literacy courses to future clients, to ensure better use of products.
- Increase of lending capital with the entry of Hollard as shareholder in December 2019, resulting in the broadening of the bank’s capital base and the diversification of the product portfolio.
- Despite COVID-19 impacts, Banco Futuro had a recovery in the number of clients and loan portfolio and increased the cost covering rate from 37% to 50%.
|Directorate/federal office responsible||
|Coordination with other projects and actors||Bank of Mozambique, the Micro Finance Association, Hollard Insurance. SDC projects: INOVAGRO, HortiSempre, Training for Skills and Employment. Other projects: Financial Sector Deepening, HOJE (Helvetas), Women in Business (Technoserve).|
|Budget||Current phase Swiss budget CHF 1’000’000 Swiss disbursement to date CHF 511’079 Total project since first phase Budget inclusive project partner CHF 14’052’000|
|Project phases||Phase 4 08.03.2021 - 30.06.2023 (Current phase) Phase 3 01.04.2018 - 31.12.2020 (Completed) Phase 2 01.07.2012 - 31.12.2017 (Completed) Phase 1 01.08.2008 - 31.07.2012 (Completed)|