World Bank supports financial sector reforms to increase access to high quality and lower cost financial services for individuals, households, and businesses in Mozambique | WPN World People News

The World Bank’s Board of Executive Directors approved a total of US$25 million for the Government of Mozambique (GoM)’s First Programmatic Financial Sector Development Policy Operation (DPO).

The first in a series aimed at promoting financial sector development, this DPO financed through an IDA* credit (US$12.5 million) and grant (US$12.5 million) directly contributes to the GoM’s financial sector strategy, and more specifically to its objective of promoting inclusion and greater financial market stability.

“This operation supports the government’s efforts in implementing the Government of Mozambique’s Financial Sector Development Strategy (MFSDS),” said Mark R. Lundell, the World Bank Country Director for Mozambique. “It will help enhance banking regulation and supervision, strengthen the banking safety net and crisis management framework, broaden financial inclusion, and improve government securities markets.”

This operation will focus on three pillars: financial stability; financial inclusion; and long term financial markets. It will reinforce financial stability by supporting improvements in banks’ risk management and asset soundness as well as safety net and crisis management resiliency frameworks. The operation will also support reforms to promote financial inclusion focusing on the credit reporting system, branchless banking and mobile banking, consumer protection, payment systems and the insolvency framework. Additionally, it will help promote long term financial markets through support to reforms focusing on the development of debt and capital markets.

“These reforms will help increase access to financial services for both households and businesses, focusing on small and medium enterprises and rural outreach,” said Mazen Bouri, the World Bank Task Team Leader for the project. “By promoting financial inclusion the DPO contributes to broad based private sector development, which is essential for job creation and poverty reduction.”

This DPO is in line with the World Bank Group’s Country Partnership Strategy for Mozambique (2012-2015), and complements the Group’s efforts in pursuit of the twin goals of eradicating absolute poverty and improve shared prosperity.

Source: World Bank