The World Bank has US$80 million available to capitalize the Angolan Credit and Guarantee Fund (FGC), within the scope of the Diversifica Mais project, to support Micro, Small and Medium Enterprises (SMEs)
The project is being led by the Ministry of Economy and Planning, whose agreement was signed in June this year. Among several beneficiary and mediating entities, the FGC will be responsible for implementing a public guarantee window for SMEs. According to the World Bank representative, Rúbem Barreto, this project aims to support the growth of SMEs in Angola. Regarding the windows of public guarantees and financing, the World Bank representative highlighted that the target of guarantees are SMEs, as financial institutions believe they are viable.
Therefore, the capital that will be used in the project will go towards the new capitalization of the FGC to finance this window in the amount of 80 million dollars. There are two sub-windows that the World Bank would like to focus specifically on, such as issuing guarantees to companies owned and controlled by women and the second window are projects called mitigation and adaptation to climate effects. Rubem Barreto said that the objective is to reach 375 SMEs, 115 of which are owned or controlled by women equivalent to credit guarantees issued. This would allow obtaining an additional 180 million dollars in credit guarantees.
The project is in the preparation phase and the Ministry of Economy and Planning is creating teams and manuals. The project, expected to arrive by 2029, will be implemented in the coming months. The World Bank wants to finance other projects for risk management reasons and because it is known that SMEs have difficulties in acquiring financing and support from large companies. On the other hand, the option is to create a ceiling for each project of up to 5 million dollars. There are some activities that the World Bank will not finance, namely those that illegally put the environment at risk. Diversifica Mais is a project that emerged as a result of interaction between the Angolan Government and the World Bank, adapting to the country’s reality and needs, with benefits for both parties.
FGC shares
The president of the FGC’s Administrative Council (PCA), Luzayadio Simba, said that regarding the institution’s shares, in global terms, the FGC issued a total of 806 guarantees, corresponding to an investment in the order of 330 billion kwanzas, which mainly benefited medium-sized companies linked to the manufacturing industry. Luzayadio Simba informed that the FGC is finalizing the conclusion of agreements with several commercial banks for the implementation of the Guarantee Acceleration and Promotion Plan. However, companies interested in obtaining financing must make applications quickly and in a simplified manner by adopting a single portfolio.
The person in charge said he was aware of the challenges that the economy faces, as a result of the macro-economic situation, but, at the same time, highlighted that he was hopeful that it was possible to reverse the scenario through joint, coordinated actions aligned with the strategic objectives of the Angolan executive, where public guarantees and financing appear to be decisive. “The participation of Micro, Small and Medium-sized Companies in the economy and in the diversification of national production is essential”, he highlighted. The forum arose in the interest of bringing together main partners to identify best practices to contribute to the relaunch of the production chain, at a time when the Executive reiterates its commitment to promoting national production to guarantee food security.
BY: Francisca Parente
