Kreditgar riskpremie USAID/Banco Terra

This contribution "Credit guarantee risk premium USAID/Banco Terra - 54020104" was managed by the Embassy of Sweden in Maputo. However, this contribution is linked to another one "54020102 Banco Terra Loan Portfolio Guarantee" that was managed by Sida Unit of Loans and Guarantees. USAID Mozambique was responsaible for managing the guarantee scheme. The following comments are also included in the closing memo of the contribution 54020102 Banco Terra Loan Portfolio Guarante. In total, 20 loans were issued under the guarantee to a total amount of USD 2 089 636. Thus, the cumulative utilization rate at the expiry date reached 92%.The average loan size has been about 428 000 USD and the average loan tenor 70 months.Sida has reimbursed two claim requests during the guarantee period, to a total amount of 110 766 USD corresponding to SEK 912 590 kr. In June 2016, 300 000 SEK were written off. No recoveries have been made so far and, hence, Sida has an outstanding claim on Banco Terra (now Mozabanco) of that amount. According to the external asseessment made by the Swedish National Debt Office by end-December 2020, the value of this claim amounts to USD 7 435 (based on a conservative estimation of the likelihood of recoveries being made; i.e. 10%).

In September 2011, Sida entered into a co-guarantee agreement with USAID/DCA (Development Credit Authority, now DFC) and Banco Terra. The risk has been shared equally between the two guarantors (25% each) and the guaranteed amount was 2 278 963 USD respectively (set to an equivalent of 22 800 000 SEK for Sida). The loan guarantee was designed to strengthen the guaranteed party´s - Banco Terra - ability to finance loans to medium-sized farm, agribusiness and tourism enterprises in Mozambique, through reducing the credit risk of defined lines of credit. A particular focus on woman owned enterprises was intended. Increased lending by Banco Terra to agribusinesses and tourism MSMEs (medium, small, and micro entreprises) should thereby stimulate economic growth as borrowers use the loan capital to expand productive capacity. The loan guarantee activities are national in scope, with special concentration on the Beira and Nacala corridors and the southern zone of Mozambique (the bank can lend anywhere, but borrowers cannot be located in Maputo City).