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RECAP DAY ONE

RECAP DAY ONE. Six presentations were done; (2 Central Bank, 1 MFIs, 2 commercial bank and 1 Government) Critical issues faced on the point of view from Central Bank (Mozambique):

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RECAP DAY ONE

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  1. RECAP DAY ONE • Six presentations were done; (2 Central Bank, 1 MFIs, 2 commercial bank and 1 Government) Critical issues faced on the point of view from Central Bank (Mozambique): • All indicators of financial deepening point to the fact that the Financial sector in is shallow even by sub-Saharan Africa standards

  2. RECAP DAY 1 Cont’d… • Incentives to broaden and widen the financial sector; • Adjustment/relaxation in Reserve Requirement; • Help reducing transaction costs (Central Bank New branches) • Regulatory enhancement (decree No. 57/ 2004;

  3. RECAP DAY ONE CONT’D … Challenges • Introduce savings culture rural communities • Improve basic infrastructure • Break the myth that Agricultural as a risky activity • Introducing an explicit deposit insurance scheme for low income depositors • Create private CRCs

  4. RECAP DAY 1 • Constraints in promoting the expansion of financial services to rural areas • Asymmetric information • Seasonality of income • sparse population base in rural areas • Massive Illiteracy Need to acknowledge that Microfinance is not a panacea (instead, is one of the tools for poverty alleviation – need for sustainability)

  5. RECAP DAY 1 • Point of View for MFIs • Critical Issues • Need for government intervention (Infrastructures, incentives, transaction cost reduction) • Lack of tangible collateral • Importance of value chain • Demand driven approach in delivering financial services • Linkages and partnership

  6. RECAP DAY 1 GOVERNMENT POINT OF VIEW • Play a supportive role – Start up Capital • Rural Finance Strategy (underway) • Fund for facilitating innovation and expansions of rural finance • Partnership between MFIs and Rural Finance • Need to ensure institutional articulation/coordination between FARE and all other stakeholders

  7. THANK YOU!

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