Angola: Govt and 19 banks sign MOU to improve access to finance for SMEs
Nineteen commercial banks in Angola have committed to lend a minimum of $1.4 billion (€1.1 billion) to small and medium-sized enterprises (SMEs) as part of the Angola Invest programme.Nineteen commercial banks in Angola have committed to lend a minimum of $1.4 billion (€1.1 billion) to small and medium-sized enterprises (SMEs) as part of the Angola Invest programme.
They signed a Memorandum of Understanding (MOU) with the finance minister on June 5th in Luanda.
In return, the government will guarantee improved interest rates and will provide lenders with a guaranty fund that will cover up to 70 percent of the loan amount.
"This act is a compromise between the involved ministers and the commercial banks. The government will be able to allocate $200 million and will set up a fund for improved interest rates of up to $155 million," said Finance Minister Abraão Gourgel, quoted by Angop news agency.
Over the past few years the Angolan government has introduced several reforms to promote entrepreneurship by offering incentives to micro, small and medium enterprises.
The government is creating a credit-scoring agency and the Angolan Development Bank has provided SMEs with investment credits in kwanza at a preferential rate of 14 percent since June 2011, Les Afriques newspaper reports.
These reforms are expected to further improve the credit indicator, states African Economic Outlook's website.
According to a report from the African Development Bank called AfDB's Private Sector Country Profile 2009, no more than two or three percent of SMEs have access to credit, mainly because of the difficulties new companies have providing guarantees.