Sixty-five SMEs benefit from Gapi’s Agro-Garante Fund

The Gapi managed Credit Guarantee Fund “Agro-Garante” has by mid-2017 guaranteed 150 Million Meticals (US$2 500 000) in bank loans to 65 Small and Medium Enterprises (SMEs) engaged in agribusiness.  The Danish Embassy (DANIDA) supported the creation of the guarantee fund in 2015 and contracted Gapi to manage it with the objective of increasing SME agribusiness access to credit.

Thus far, Agro-Garante has provided guarantees for loans granted by four commercial banks: BCI, BIM, BTM and FNB.  Of the total 150 million Meticals, 40 million Meticals (US$700 000) was approved this year alone, despite a retraction by commercial banks in financing agriculture and agribusiness in general.   These 65 beneficiaries of the Agro-Garante scheme loans employ altogether 1,700 workers.

The Agro-Garante financial guarantee service has already benefited SMEs in eight provinces with the highest demand from Zambezia, Tete, Nampula and Gaza. Gapi, as manager of Agro-Garante, believes that the impact and scope of this guarantee fund can be improved and is therefore making continual adjustments.

The concept of the Agro-Garante scheme originates in support from Portuguese Cooperation through technical assistance provided by the Portuguese Mutual Guarantees Society. Due to the lack of a legal framework to implement a system of mutual guarantees, Gapi obtained support from Denmark to implement an optional instrument, which is the current Agro-Garante. Through this facility, the Agro-Garante shares the credit risk with the banks to encourage them to increase financing to agribusiness operators.

The granting of these guarantees allows small and medium-scale farmers to expand their businesses through the acquisition of agricultural inputs leading to overall improvement of production and commercialization.


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