Moz launches first rural bank

Maputo – Mozambican President Armando Guebuza on Wednesday formally inaugurated the country’s newest commercial bank, Banco Terra (Land Bank), the first Mozambican bank that will focus specifically on agriculture and the countryside.

The bank is the brainchild of the Mozambican investment company, GAPI, which negotiated for three years with foreign partners to set up Banco Terra. GAPI holds 29.3 per cent of the shares of the bank, and the private Dutch bank, Rabobank, which also specialises in agricultural financing, holds 30.7 per cent.The remaining 40 per cent is divided equally between the German and Norwegian development finance bodies, KFW and Norfund.The initial capital for Banco Terra is 185 million meticais (about US$7.7 million) Antonio Souto, GAPI chairperson and deputy chair of the new bank, told reporters that he expects an increase of around 50 per cent in the Banco Terra capital in the near future.The equivalent of US$16 million will be spent over three years to ensure that the bank operates out of 20 branches, mostly located along strategic corridors for agricultural marketing.Banco Terra has started with its headquarters in Maputo and a branch in the northern city of Nampula.By the end of 2008 it will have branches in the fertile agricultural districts of Malema, west of Nampula, and Angonia in Tete province, as well as in Tete and Beira cities.Guebuza declared that the launch of Banco Terra “is an important landmark in dynamising our already vibrant financial system.Its birth gives substance to our promises to provide an increasing space for private commercial banking in social and economic development.”Banco Terra chairperson Arnold Kuijpers stressed that, while the new bank intends to be a rural bank, “it will not just deal with agriculture.That would not be viable.”Financing agriculture alone would involve unacceptable risks, and an insufficient number of transactions.”You need a lot of transactions to service clients at a low cost,” said Kuijpers.His view of a rural bank was “a bank that serves all market segments, but prioritises the market segments in rural areas and farming”.He stressed the opportunities for investment in Mozambican agriculture, since currently only 13 per cent of the country’s 36 million hectares of arable land is being used.”Mozambique is in a position to develop its agriculture and to export food,” Kuijpers said.Nampa-AimGAPI holds 29.3 per cent of the shares of the bank, and the private Dutch bank, Rabobank, which also specialises in agricultural financing, holds 30.7 per cent.The remaining 40 per cent is divided equally between the German and Norwegian development finance bodies, KFW and Norfund.The initial capital for Banco Terra is 185 million meticais (about US$7.7 million) Antonio Souto, GAPI chairperson and deputy chair of the new bank, told reporters that he expects an increase of around 50 per cent in the Banco Terra capital in the near future.The equivalent of US$16 million will be spent over three years to ensure that the bank operates out of 20 branches, mostly located along strategic corridors for agricultural marketing.Banco Terra has started with its headquarters in Maputo and a branch in the northern city of Nampula.By the end of 2008 it will have branches in the fertile agricultural districts of Malema, west of Nampula, and Angonia in Tete province, as well as in Tete and Beira cities.Guebuza declared that the launch of Banco Terra “is an important landmark in dynamising our already vibrant financial system.Its birth gives substance to our promises to provide an increasing space for private commercial banking in social and economic development.”Banco Terra chairperson Arnold Kuijpers stressed that, while the new bank intends to be a rural bank, “it will not just deal with agriculture.That would not be viable.”Financing agriculture alone would involve unacceptable risks, and an insufficient number of transactions.”You need a lot of transactions to service clients at a low cost,” said Kuijpers.His view of a rural bank was “a bank that serves all market segments, but prioritises the market segments in rural areas and farming”.He stressed the opportunities for investment in Mozambican agriculture, since currently only 13 per cent of the country’s 36 million hectares of arable land is being used.”Mozambique is in a position to develop its agriculture and to export food,” Kuijpers said.Nampa-Aim

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