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Diversifying for growth.

Mozambique has an opportunity to build profitable enterprises in all sectors, but meeting financing needs will be key, says Ibraimo Ibraimo, Chief Executive Officer of Moza Banco

What are the biggest challenges and opportunities in the Mozambican banking sector right now?

Mozambique is a fast growing economy. Most of its population's incomes are generated in the rural agricultural sector, but Mozambique's economy has now a great mineral-resources potential. The main goal should be to enhance taxes and other revenues collection from the resources sector to be maximised and channeled through the country's budget. As the country turns itself into a mineral resources economy, it should focus on human capital development, basic investment in infrastructure and utilities to assist the development of the mineral resources and, in particular, the diversification and strengthening of the non-mineral sectors.

These investments will pose great challenges to the banking sector which should be quite dynamic and innovative to support both the local industry growth needs and the small- and medium-sized companies' finance needs; but also, the Government in its initiatives to broaden the growth base and its inclusiveness, and assist the large resource companies. Sustained and accelerated growth can only be achieved if it is properly supported by access to finance and expertise that banks can provide. Then, in a country with accelerated growth perspectives creates enormous opportunities to the banking sector. The challenges are to be innovative and diversified enough to ensure that as banks expand their finance this is done in a way it covers quite different client needs, from large corporations to small companies and individuals, and Government agencies and institutions. It will be critical to follow the best practices of robustness, transparency and strong finances in the banking industry.

Finally, the sector will also have to improve its technical background and expertise to ensure it is ready for the new challenges and initiatives and for clients to see they have an excellent advisor on technical expertise to finance their programs and ideas.

What is your outlook for the impact that commodities' decline could have on the economy and banking?

Commodity prices are affected dramatically by volatility of prices. In particular, governments and companies are significantly affected. It is an excellent practice for countries that can turn their economies [that are] very fast and very dependent on commodities to establish funds to protect from this volatility and create wealth that gradually will ensure that, over time, this dependency is reduced by enormous investments in human capital, infrastructure, productivity and competitiveness in the non-resources sectors. In absence of these funds, low prices dramatically impact the sustainability of government and companies revenues. This can induce the collapse of significant sectors of the economy and impact the banking sector performance as loans may default.

Mozambique is still at the very beginning of the development of the resource sectors and the current commodity market decline could decelerate investment in these sectors. It is hoped that these investments will continue to be implemented however at a slower pace, following developments in the world markets for those commodities existing in Mozambique.

What role do you see the financial sector playing as Mozambique diversifies and grows its economy?

The financial sector is pivotal to growth and diversification of the economy. Access to finance and innovative financial instruments, together with expertise, will be the main role of the financial sector to ensure that growth and diversification are achieved and sustained. Banks being innovative will explore new financial instruments that will serve every type of clients, from large corporations to micro-enterprises, consumers and the Government. Moza Banco is currently expanding and implementing new instruments from banking agents at markets to specialised financial instruments for large corporations, government investment activities and government funds and institutes.

What are some of Moza Banco's biggest highlights for 2015, and what are some goals for 2016?

The year 2015 has been a remarkable one for Moza Banco. The various measures and initiatives planned were successfully implemented, thus projecting Moza as a reference in the national financial system.

This year, we witnessed a substantial increase in the number of business units, with 14 new units, and we expect to open over 40 branches until the end of the [next] year, totaling 61 business units.

The remarkable growth in the number of business units, but also in providing new solutions and means of payment, allowed us to more than double the customer base, representing growth of 105 per cent. We also had a 33 per cent growth in financial turnover and 34 per cent in resources, therefore consolidating our position as the fourth largest bank operating in Mozambique with a market share last October of around 8.75 per cent.

In October, Global Credit Ratings assigned national scale ratings to Moza of BBB (MZ) and A3 (MZ) in the long term and short term respectively, with a stable outlook. This ensures that the Bank has satisfactory liquidity levels and protective factors appropriate for a prudent investment.

In 2016 we remain innovative, becoming the first Mozambican bank to launch the banking agents, a service that we call 'Moza D[acute accent]Agente'.This innovative solution will allow us to reach out in a faster, simple and effective to people from all the provinces and districts, providing essential financial services such as cash withdrawals, deposits, transfers, among others. Our goal is to have a network of more than 1,000 banking agents by the end of 2016; this is expected to be a major contribution for financial inclusion.

The recruitment and training of employees also remained a top priority in 2015. Let me highlight the outstanding contribution of Moza in job creation, as this year we admitted more than 220 employees, which put Moza as one of top employers in the financial sector in 2015.

We also renewed our website and the internet banking services for both individuals and companies by adding new features-some of which are unique in the market-providing greater security, modern graphics and more intuitive and direct navigation.

Another significant milestone this year, that I cannot fail to mention, is our rebranding. Public presentation took place last November and since then we have been earning high praise from our customers and society at large.

Next year we intend to continue the pace of growth we have been experiencing, consolidate the supporting infrastructure, and expand our presence by opening new branches and introducing new channels, thus becoming ever closer to our customers, providing a wide range of products and services adjusted to their diverse needs and expectations.

What drove Moza Banco's recent rebranding? What has been the feedback or impact of the transformation?

In 2013, Moza Banco has redefined its five-year strategic plan for the period ranging from 2014 to 2018 and as a result began an overarching organisational transformation programme to expand its geographic presence and modernise and reinforce its technological infrastructure with the clear goal of establishing itself as a relevant financial institution in Mozambique.

This process is leading us to a change in various levels including in our brand. With the rebranding we want to reinforce and better communicate what we are becoming: a Universal Retail Bank serving all layers of Mozambican society.

With the new corporate image, we materialise assertively our determination, confidence, commitment and, I would say, our mission to provide financial products and services that meet the needs of each and every citizen resident in Mozambique, regardless the sector of society where they are. With the new image strengthen the values of responsibility, competence, professionalism, which are references for our institution. This rebranding is geared toward an enhanced customer experience with the Bank.

In such a short period of time, it is already notorious radical change in the way Moza is seen from the outside. The market and particularly our customers welcomed this transformation, they perceive our message. Our effort, creativity and dedication are definitely being rewarded.

What do you foresee being your biggest sectors/services for growth, and why?

The largest sector will be the resource sector, from minerals to gas and oil, in Mozambique. However, these will be capital-intensive and with a rapidly growing labour force in Mozambique the creation of jobs should be at the core of policies. Agriculture will have to see fast expansion as it absorbs now almost three quarters of the working population in terms of productivity and competitiveness, energy from hydro as the country's potential is phenomenal and a huge excess demand for electricity exists in the whole Southern Africa region, services in particular transports for access to major international markets by Mozambique but mostly by inland countries and South Africa.

The tourism sector also has a great potential for which Mozambique should create conditions to continue its expansion-this is a very labour-intensive sector, directly through the tourism infrastructure and services but also through other sectors like restaurants, tours, fishing, sightseeing, taxi and transportation, etc.. Moza is equipping and producing new financial systems and strengthening its staff, infrastructure and instruments to be at the forefront of the financial sector expansion with the quality, timing and dedication as our key motto.

What sectors of the economy do you think should be the top priorities for investment (private or public) for sustainable growth in Mozambique?

The resource sectors should be at the top and the major players should be the main mining, gas and oil companies. The Government should ensure that it maximises tax and other revenues from these sectors. These revenues should, as institutional capacities are developed and strengthened, then be invested in human capital development, basic infrastructure, agriculture and forestry development with massive impact on productivity, competitiveness and right management of resources, energy development in particular the hydro potential, transport sector modernisation and faster services to assist and sustain growth and inclusiveness of growth. The financial sector should play its vital role of supporting this growth, diversifying the economy and providing the best expertise to clients.

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Publication:CPI Financial
Geographic Code:6MOZA
Date:Jan 12, 2016
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