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Challenges Around Financial Services Access in the Agricultural Sector in Mozambique
Challenges Around Financial Services Access in the
Agricultural Sector in Mozambique
Edwardo Mondlane University
Member of the Mozambique Local Analysis Network
1. The development of agricultural
sector is crucial for the
development of the country as it
contributes with about 23% to
the GDP and employs about
80% of the labor force.
2. CCADP (2003): 10% of the
budget for agriculture
3. MALABO (2014): Double
access to financial services by
Contribution of key sectors in the economy
to review the policy framework guiding farmers’ access to financial
to describe the financial organizational set up and functions;
to analyze the trends of farmers’ access to financial services; and
to identifying the key challenges and opportunities faced by
farmers when accessing financial services.
• Qualitative analysis
Description of existing policy framework (Key objectives and targets)
Description of existing organizational framework
• Trend analysis
Financial inclusion index
Number of bank accounts
Electronic money account
Accumulative Savings and Credit Associations
IV. RESULTS: POLICIES
Rural Development Strategy (2007-2025)
Economy Bancarization Strategy in 2007;
Rural Financing Strategy in 2011;
Strategy for the Development of Financial Sector (2013-2022)
National Strategy for Financial Inclusion (2016-2022)
IV. RESULTS: FINANCIAL SERVICES
Trend of bank accounts per 1000 adults
IV. RESULTS: ACCESS TO FINANCIAL SERVICES
Electronic money account users
IV. RESULTS: ACCESS TO FINANCIAL SERVICES
Proportion of men and women using Accumulative Savings
and Credit Associations (ASCAs) as mean
for accessing financial services
IV. RESULTS: SMALLHOLDER ACCESS TO FINANCIAL SERVICES
Smallholder access to financial services
IV. RESULTS:CONSTRAINTS TO SMALLHOLFER FINANCIAL SERVICES ACCESS
1. Low production and productivity yielding to low farmers’
2. Lack of assets (land) to be used as collateral
3. Limited coverage of financial institutions
4. High interest rates coupled with lack of agricultural insurance
5. Farmers’ illiteracy regarding financial markets
6. Limited government institutionalization of informal
mechanisms for promoting access to financial services
1. Smallholders’ financial inclusion is driven primarily by informal services, as 12
percent of them access informal services, compared with 8 percent who access
banks and 2 percent who access other formal services.
2. Smallholder access to financial services is higher in urban areas compared to rural
3. The access to formal services is estimated to be 32.9% and being dominated by
men (60% of bank account holders) compared to their women counterparts
4. The percentage of adults having electronic money account through mobile phone
increased from 1% in 2012 to 40% in 2016.
• In 2015 men were using more mobile account than women but the women counterparts have
practically matched the use of mobile accounts in 2017 with minimal difference of 9 percentage
points (81% for women vs 90% for men).
5. ASCAs are used successfully and, where they have been
introduced, are highly valued as a means of saving and
benefiting mainly farmers and especially women (67%) is the
• The key feature of ASCAs is its geographical coverage as it is present
in all districts with coverage rate above 50% in all provinces except
Zambezia with coverage rate of 41%.
VI. RECOMENDATION FOR MASA
1. Promote the expansion of private sector with direct participation of the
2. Promote the efficiency of pro-smallholder value chains.
3. Explore models of using land as collateral.
4. Continue to promote the use of mobile accounts.
5. Regulate/institutionalize the main informal means of accessing financial
6. Continue to promote the establishment of non and bank agents in rural
7. Collect and analyse data related smallholder access to financial services.