MILLENIUM BIM WORKS TO HELP MOZAMBIQUE OVERCOME PANDEMIC

Millennium bim is one of Mozambique’s major banks, with a 25.4% share of deposits. It takes its responsibilities in helping the country to recover from Covid-19 seriously as CEO José Reino Da Costa tells us in the following interview

What’s your assessment of the current situation regarding the Mozambican economy? How has the pandemic affected the economy and the country?

In recent years, Mozambique has seen low rates of growth. The GDP growth forecast for 2020 was less than 1% because of the challenging global situation, which led to a fall in demand for exports and slowing rates of private investment. The Covid-19 pandemic struck at a time when the economy was still recovering from the devastation caused by cyclones Idai and Kenneth.

Because of the pandemic we have a lockdown and other restrictive measures, meaning that a number of economic activities couldn’t continue, while others faced falling demand and unreliable supply, with recovery expected to be slow over the coming months.

Given this backdrop — as well as other adverse impacts of Covid-19, including falls in personal income, employment, entrepreneurship, exports and public finances and worsening business conditions — an economic recession is expected for 2020, as with the rest of the world.

The macroeconomic environment shows significant uncertainty, and the economy’s strength will be closely tied to how the pandemic progresses, and how levels of domestic and foreign demand affect Mozambican companies.

What about the banking sector? How has Millennium responded to the pandemic?

Naturally, the financial system is going to suffer when people and businesses have less money to spend. Fewer resources coming into the economy may lead to borrowers defaulting on their loans, which will cause financial damage to banks and directly affect their liquidity.

Weakening of economic activity could lead to an increase in non-performing loans, inequality and capital consumption, and a reduction in the liquidity of banks, in particular falling foreign currency reserves caused by collapsing exports. The banking sector also faces challenges from:

• increased operating costs

• the fall in the value of the metical

• the reduction in interest rates and

• an exemption from fees and charges for digital transactions that has halved commissions on transfers.

As a result, banks need to reconsider their strategies so that they can continue to operate over the long and short term.

Against this economic and financial backdrop, Millennium bim has sought to safeguard profitability and maintain decent levels of liquidity and capital. The bank has implemented a range of measures, including cutting costs, supporting clients by identifying sensitive economic sectors with a higher likelihood of defaults, negotiating alternative loan repayment plans with payment holidays, paying supplier invoices early, and optimising remote banking to make access easier.

What kind of funds does Millennium have available to support companies and the economy?

Millennium bim is in a very comfortable and privileged position in terms of capital and liquidity. It has the resources to support its clients during this difficult time, including a diverse portfolio of flexible products and services tailored specifically for SMEs.

The closeness and trust between Millennium BIM and SMEs is shown in other ways too. One is the MLíder Programme, which recognises the best companies by placing value on goodwill, financial stability, and contributions to the growth and sustained development of the economy.

We are a bank that works hand in hand with SMEs. In 2018 we launched a campaign called “Here there is a bank to give you a helping hand”, which focused on supporting companies, such as by offering management solutions, investment support and guarantees, support for capital reserves and shortterm financing, assistance in international trade, and payment and billing solutions.

We will continue to focus on creating strategic initiatives with the aim of helping the business sector recover from the effects of the crisis caused by the Covid-19 pandemic and promoting a prosperous, dynamic, innovative, competitive and inclusive business environment.

What social responsibility and social action initiatives is the bank currently implementing?

As a major player in the Mozambican financial market, We have a particular responsibility to contribute towards dynamic social action and a lively economy. We keep our strategic axes in close alignment with the Mozambican Government’s goal of promoting better access to basic services, including financial services, with public quality of life always front and centre.

While this is a historic year for the bank, marking 25 years of growth and success, we will abstain from celebrations. The budget of 15m meticals that we had put aside to commemorate this milestone will instead be donated towards providing equipment for the cardio-pneumology department of Maputo Central Hospital to increase its capacity to respond to public needs arising from the fight against Covid-19.

Led by our strategy of sustained expansion and growth, and with a clear vision of what we want from the future, our goal is to always be a key partner for Mozambicans — in good times and bad — by driving forward social responsibility projects to promote wellbeing in all communities. ■