African Development Finance Institutions: Gapi achieves “A” rating

Gapi achieved an “A” rating amongst the Development Finance Institutions (DFIs) members of AADFI (African Association of Development Finance Institutions). This classification came about from an annual evaluation of the performance of the finance institutions who are members of AADFI and in light of the PSGRS system (Prudential Standards, Guidelines and Rating System). The “A” rating is attributed to the institutions whom the degree of compliance to the established norms of management and sustainability is equal to or exceeds 80%. On the last evaluation, referring to the financial year of 2015, Gapi obtained 81%.

AADFI currently has 80 finance institutions involved in development finance for Africa. This institution was founded in March of 1975 under the auspices of the African Development Bank (ADB). In 2008 its members approved PSGRS as a model and instrument to be used for the evaluation of the performance of its members.

ADB, as a continental Development Finance Institution (DFI) assisted AADFI in implementing the PSGRS amongst its members in order to promote the consolidation of national African DFIs. The PSGRS evaluates affiliated institutions in the key areas: Governance, Finances and Operations. This evaluation is scrutinised by external auditing firms, which are internationally recognised. Gapi has been participating in this evaluation mechanism since 2011, having that year obtained a classification of 67% which corresponds to a rating of C+.

Gapi’s governance is based upon a public-private shareholding structure which combines 30% of public sector, 55% of private entities and 15% civil organizations whom, in 2014, approved an action plan to update its strategy . This new strategy, which is at an initial implementation stage, provided Gapi with more clarification and restructuring of its businesses and a more adequate framework under the legal category of an Investment Bank, under the norms of the Bank of Mozambique who is the regulatory authority of the financial sector.

Gapi’s new strategy is inspired on public politics which were expressed in guiding documents approved by the Government and focus on the promotion and consolidation of the national business community and improving financial instruments that contribute to a more inclusive economic development of Mozambique. In that sense, projects aimed at building a network of rural financial services are prioritized which are interlinked with the expansion of technical assistance services to small and medium enterprises operating in sectors linked to food security, work generation and promoting women and youth entrepreneurs.