Promoting local currency financing for SMEs

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BIO’s first investment in Mozambique

BIO has granted a USD 15m senior loan to Banco Comercial e de Investimentos (BCI), a commercial bank in Mozambique. The loan has been extended in local currency through a swap with TCX , and will be used by BCI for on-lending to SMEs. This is the first sizeable local currency transaction by a foreign lender, and also BIO’s first investment in Mozambique (a partner country of the Belgian Development Cooperation).

BCI has significantly expanded its market presence over the recent years, notably through the opening of many new branches. Today it is a truly universal bank targeting all segments, including SMEs. The success of this transformation into a universal bank is reflected in the many awards BCI has gained in 2011 and 2012.

BIO’s loan will enable BCI to provide loans in local currency with longer tenors to 15-20 SMEs, hereby contributing to maintaining or creating approximately 450 jobs. It will also demonstrate the viability of long-term local currency financing from foreign sources, and hence contribute to increasing access to financing by SMEs, which have essentially local currency revenues and require long-term financing for investment purposes.

This project is in line with BIO’s strategy of supporting private banks that contribute to the enhancement of financial inclusion in developing countries, more specifically through the financing of SMEs.

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