WASHINGTON, September 29, 2015– The World Bank Board of Executive Directors today approved a US$25 million credit in support of the Government of Mozambique (GoM)’s Financial Sector Development Strategy, which aims at promoting greater financial inclusion and market stability.
This second in a series of financial support is funneled through the World Bank Programmatic Financial Sector Development Policy Operation (DPO), which seeks to reinforce financial stability by supporting improvements in the banks supervision and regulations, safety net, and crisis preparedness frameworks. The operation also supports reforms to promote financial inclusion focused on credit reporting systems, branchless banking and mobile banking, consumer protection, payment systems and insolvency frameworks. Additionally, it helps promote long term financial markets through support to reforms in capital markets (particularly Government debt markets) and to expand the insurance and pension coverage.
“For Mozambique to achieve broad-based growth and for the private sector to generate jobs, it is imperative to deal with the ongoing challenges of access to finance for firms and households,” said Mark R. Lundell, World Bank Country Director for Mozambique. “This DPO series has three main objectives: increase financial inclusion, improve financial stability, and strengthen long term financial markets in Mozambique.”
Evidence strongly indicates that if effectively regulated and supervised, improved financial services have the potential to spur economic growth, reduce income inequality, and help lift households out of poverty. This DPO supports directly the GoM’s Financial Sector Development Strategy which seeks to broaden financial inclusion, and enhance banking regulation and supervision, strengthen the banking safety net and crisis management framework, and improve government securities markets.
“I’m pleased with the current implementation of this DPO series, which is fully aligned with the GoM priorities,” said Mazen Bouri, the World Bank co-Task Team Leader for the DPO. “The GoM recognizes the importance of financial services development to reduce poverty and improve the business environment.
“’Towards that end, a number of financial services reforms have been initiated and the Mozambique Financial Sector Development Strategy 2013-2022, which received our support from the outset, was adopted to provide a vision and a comprehensive and detailed roadmap for reforms in the financial services,” added Yira Mascaro, the World Bank co-Task Team Leader for the DPO.
This program is in line with the World Bank Group’s Country Partnership Strategy for Mozambique (2012-2015), and complements the Group’s efforts in pursuing its twin goals of eradicating absolute poverty and improve shared prosperity in the world.