At a time when strengthening the business fabric is cited as one of the pillars of Mozambique's economic development, Portugal has decided to reinforce its commitment to Mozambican micro, small and medium-sized enterprises. The support will be channelled through the Portuguese Cooperation Business Fund (FECOP), currently endowed with around 17 million euros, a mechanism designed to facilitate access to financing and stimulate the growth of the private sector.
The announcement was made this Wednesday by Helena Guerreiro, head of Cooperation at the Portuguese Embassy, during the second edition of the Mozambique–European Union Business Forum (Global Gateway), which ends today in Maputo.
"FECOP is a financial cooperation instrument and currently has a budget of around 17 million euros. It is a fund aimed exclusively at the Mozambican private sector, in particular micro, small and medium-sized enterprises, as well as producer associations and cooperatives," she said.
Created in 2014, the fund is considered one of the main tools of economic cooperation between Portugal and Mozambique. According to Helena Guerreiro, the mechanism was designed to respond to some of the structural challenges faced by national businesses and has recently undergone a reform intended to make it simpler and more effective to use.
"Last year we carried out an evaluation and identified some constraints that were affecting the use of FECOP, at least in the way we would like it to be used," she acknowledged.
Following that review, the instrument is now organised into different support lines.
The first is for companies, associations and cooperatives. This component finances investment projects and can guarantee up to 90% of the credit granted, with a maximum limit of around 25.5 million meticais (345,400 euros), requiring a minimum equity contribution of 20% of the investment.
The second line is aimed at companies located in areas affected by natural disasters. In this case, the financing can be used for both investment and working capital needs, offering guarantees of up to 85% and a ceiling of approximately 6.5 million meticais (88,000 euros).
The third component targets microfinance institutions, seeking to strengthen their credit portfolios. The mechanism provides guarantees of up to 90% and a financing limit of approximately five million meticais (67,700 euros), allowing resources to reach a larger number of businesses indirectly through these intermediary bodies.
The fund also includes a grants component for micro and small enterprises, especially those linked to youth initiatives and considered priorities. This direct support can reach around 450,000 meticais (60,900 euros), with the aim of promoting competitiveness and driving business development.
"With the grants, the application procedures have been significantly simplified so that participation can reach the levels we expect," Helena Guerreiro stressed.
Overall, the instruments made available by FECOP include subsidised interest rates, indexed to the Prime Lending Rate, with reductions considered significant in order to make credit more accessible to Mozambican companies.
The strengthening of this mechanism follows the sixth Bilateral Summit between Portugal and Mozambique, held in December in the city of Porto, during which the two countries signed 22 legal cooperation instruments. These included an addendum to the 2022–2026 Strategic Cooperation Programme.
On the same occasion, the Portuguese Government concluded with the Mozambican Banks Association the agreement to operationalise the FECOP financial support protocol, originally launched in Maputo in 2014 with an initial allocation of 13 million US dollars (11.1 million euros) to support the development of the Mozambican business sector.
