03 October 2015, Maputo — The Board of Executive Directors of the World Bank has approved a loan of 25 million US dollars to support the Mozambican government’s financial sector development strategy.
A World Bank press release describes the strategy as “aimed at promoting greater financial inclusion and market stability”.
The loan, approved by the Board on Tuesday, is the second credit channeled through the World Bank Programmatic Financial Sector Development Policy Operation, DPO.
The release says this operation “seeks to reinforce financial stability by supporting improvements in the banking supervision and regulations, safety net, and crisis preparedness frameworks. The operation also supports reforms to promote financial inclusion focused on credit reporting systems, branchless banking and mobile banking, consumer protection, payment systems and insolvency frameworks”.
“For Mozambique to achieve broad-based growth and for the private sector to generate jobs, it is imperative to deal with the ongoing challenges of access to finance for firms and households,” said Mark R. Lundell, World Bank Country Director for Mozambique, cited in the release. “This DPO series has three main objectives: increase financial inclusion, improve financial stability, and strengthen long term financial markets in Mozambique.”
The Mozambican government, Lundell added, “recognizes the importance of financial services development to reduce poverty and improve the business environment”.
The Bank claims that, if effectively regulated and supervised, improved financial services have the potential to spur economic growth, reduce income inequality, and help lift households out of poverty”.
The loan will directly support the Mozambican Financial Sector Development Strategy “which seeks to broaden financial inclusion, and enhance banking regulation and supervision, strengthen the banking safety net and crisis management framework, and improve government securities markets”.