Credit for small scale fishery in Mozambique

Abstract

The small-scale fishery is a traditional activity and enrolled in social and cultural practices of the coastal communities and some places of the inland waters of Mozambique. This activity is one of the largest sources of income and employment. In 1990, Mozambique adopted the market economy and since 1992, the State begun a progressive liberalisation of financial institutions. At the same time, Government defined politics with the aim to establish some institutions to provide credit for small scale activities. Access to the credit for small-scale fishery, particularly, artisanal fishery, continues to be difficult, for example: a limited number of financial institutions, difficulties of answering to the requirements and the pre-conditions access, mainly those related with the provision of real warranties and shares, etc. Actually, the small-scale fishery in Mozambique is financed through a variety of mechanisms and sources sometimes in combination form. Thus, the State should promote actions public as private for the establishment of effective programs, which have socio-cultural, economical and political components. The supportive guaranty could be one of way for changing commercial banks and some registered credit institutions behaviour, turning the most credit accessible for small-scale fishery. The support model of loans in groups (for instance, associations and/or committees) could be a way to reduce the operational costs of the financial institutions; on the other hand, these fishermen associations or commissions can still require guarantee. Like this, the financial institutions will be minimizing a loan risk, through loans in-group and supportive guaranty, simultaneously. The issue is increase more and cheaper credit for artisanal fishermen, in the long run. The perspective is that the coastal communities will grow possibilities of making a living outside fisheries, and the pressure on the fishery will reduce; probably, the overcapacity consists of labour or employment, which is easier to replace in case of alternative employment possibilities, for instance, agriculture, trader, etc.