Financial Sector Deepening Mozambique

Overall, the final evaluation assessed that actions taken by FSDMoç which are going to be sustainable over time include over 60 initiatives, where FSDMoç provided various types of support. Results are found at both macro, meso and micro level. At Macro level, contributing to the adjustment of the legal and normative framework, FSDMoc was partnering with policy makers and regulators which have resulted in changes that will not likely be reversed. For example, the following were sustainable products: a new regulation for agent banking (Aviso No. 10/GBM/2020 of 17th December 2020) which included some recommendations based on the Agent banking and non-banking in Mozambique study facilitated by FSDMoç; a set of draft regulations on simplified bank accounts and draft amendments to reduce the legal minimum age to open accounts from 21 to 16 years old prepared by the Central Bank (BoM); and the amendment of the Law of Credit Institutions and financial societies (ICSF 20/2020). FSDMoç did not directly develop policies or strategies, it did, however, act both as a facilitator for pertinent subjects for discussions and as a bridge between private sector entities and the BoM and MEF to aggregate issues of concern as contribution for the development of adjustment of the legal and normative framework. FSDMoç also performed a relevant role in the implementation of the National Financial Inclusion Strategy by commissioning interventions, studies and actively participating in events to promote financial inclusion with particular focus on targeting women. FSDMoç also contributed to institutional capacity building of the capital market regulator, BVM, and supported training to regulators, policy makers and academics to introduce the subject of capital markets. Most of these interventions produced results that are sustainable (ex. BVM, NFIS). At Meso level, in terms of bringing about sustainable change to financial system infrastructure, FSDMoç was a content partner in the interventions related to inclusive rural agricultural insurance using GIS technology; it contributed to innovations in digital market place platforms: it helped to bring into play an electronic-ticketing system on public bus transportation; it provided technical and financial support to the development of a micro-insurance channel for low-income segments and digital payment platform. TA was also provided to support the development of a comprehensive and accepted Interoperability model in Mozambique, engaging financial sector players as well as the Bank Association and The Central Bank. FSDMoç participated in saving groups interventions facilitated by organizations like Ophavela, CARE, services using PAYGO models using M-Pesa, like the solar energy systems from Epsilon Energia Solar and Solar Works, promotion of microinsurance services, especially for services like funeral insurances and financial literacy. There was also support to Vodafone M-Pesa, SA to increase the outreach in terms of products education, facilitation and doubling of their agent and their geographical distribution. It has put into place MoUs signed with banks in order to facilitate the establishment and expansion of agent banking. All the above actions are expected to generate behavioural change and other effects at the Micro level for vulnerable people, including women, youth, MSME and smallholder farmers. The nature and sustainability of the changes that could be generate there are not clear since the change process has barely begun. However, experience in other countries in Africa and elsewhere (ex. Kenya) show that where services are offered and access provided, financial inclusion happens and continues to deepen.

The FSDMoç intended outcome is a broader and more inclusive financial sector in Mozambique. This will be done through multi-system intervention approach at (i) macro level to improve policies and regulations that govern the functioning of the financial sector and the data that supports effective policymaking; (ii) meso level to build institutions and infrastructure that support the functioning of the financial sector (like credit reference bureaus, collateral registries, and mobile payment platforms) as well as facilities to support financial service providers in advocacy and training; (iii) micro level focused on working with financial institutions to develop and deliver products and services targeted at poor households and MSMEs as well as working on the demand-side challenges associated with literacy and education, gender discrimination and lack of adequate collateral and property rights.