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Guebuza inaugurates Banco Terra
11/09/2008 |
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Mozambican President Armando Guebuza Wednesday formally inaugurated the country's newest commercial bank, Banco Terra (Land Bank), the first Mozambican bank that will focus specifically on agriculture and the countryside.
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By
PANAPRESS |
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The bank is the brainchild of the Mozambican investment company, GAPI, which negotiated for three years with foreign partners to set up Banco Terra.
GAPI holds 29.3 per cent of the shares of the bank and the private Dutch bank Rabobank, which also specialises in agricultural financing, holds 30.7 per cent.
The remaining 40 per cent is divided equally between the German and Norwegian development finance bodies, KFW and Norfund.
The initial capital for Banco Terra is 185 million meticais (about US$ 7.7 million), Antonio Souto, GAPI chairperson and deputy chair of the new bank, told reporters, saying that he expected an increase of around 50 per cent in the Banco Terra capital in the near future.
The equivalent of US$ 16 million will be spent over three years to ensure that t he bank operates out of 20 branches, mostly located along strategic corridors for agricultural marketing.
Banco Terra has started with its headquarters in Maputo and a branch in the northern city of Nampula.
By the end of 2008, it will have branches in the fertile agricultural districts of Malema, west of Nampula, and Angonia in Tete province, as well as in Tete and Beira cities.
Guebuza declared that the launch of Banco Terra "is an important landmark in dynamising our already vibrant financial system. Its birth gives substance to our promises to provide an increasing space for private commercial banking in social and economic development."
He recalled that the government's plans to make the 128 rural districts "poles of development" involved decentralising human and financial resources.
He was convinced that there are sustainable business opportunities in the districts, and hence the possibility of savings - but this could only become efficient if banks set up branches in the districts.
"The government's expectation is that the Green Revolution and the programmes of decentralisation and rehabilitation of infrastructures, which result in the increased availability and circulation of money in the districts, will make it attractive for banks to operate here," said Guebuza.
The government's attempts to persuade banks to operate in the districts was having some effect, the President believed, noting in early 2007, the number of districts with bank branches was just 28, which as of July 2008, had risen to 39 - but that still leaves 89 districts without a single bank between them.
Guebuza pointed out that, without banks or other savings institutions, peasant farmers are obliged to keep their money in unsafe conditions, hiding it in mattresses or burying it in the yard.
Not only was money kept in this way vulnerable to fire or other disasters, but it was completely unproductive.
"We want savings that enter the economic circuit, through re-investment in productive sectors, thus multiplying available resources and accelerating investment," stressed Guebuza.
"Increased production and productivity and the availability of greater credit opportunities for small and medium companies depends to a large extent on attracting these savings.
Souto told the ceremony that GAPI had worked to establish Banco Terra, "so that Mozambique can have a more modern and inclusive financial system.
"As in all serious negotiations, there were difficult moments before we reached agreement", said Souto, adding that the determining factor had been "our ability to show that resources channeled through GAPI had made loans available to dozens of small companies, creating thousands of jobs."
Banco Terra chairperson Arnold Kuijpers stressed that, while the new bank intended to be a rural bank, "it will not just deal with agriculture. That would not be viable, noting that financing agriculture alone would involve unacceptable risks, and an insufficient number of transactions.
"You need a lot of transactions to service clients at a low cost", said Kuijpers
His view of a rural bank was "a bank that serves all market segments, but prioritises the market segments in rural areas and farming."
He stressed the opportunities for investment in Mozambican agriculture, since currently only 13 per cent of the country's 36 million hectares of arable land is being used.
"Mozambique is in a position to develop its agriculture and to export food," Kui jpers said, assuring that "Banco Terra will facilitate this."
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