The Bank of Mozambique has reduced the prudential requirements applied to loans covered by the Mutual Guarantee Fund, allowing commercial banks to allocate less capital against these operations in a move designed to ease financing for businesses, particularly micro, small and medium-sized enterprises.

The change is set out in Notice No. 8/GBM/2026, which establishes a 30% risk-weighting factor for the portion of loans covered by eligible guarantees issued by the Mutual Guarantee Fund, up to the limit of the amount actually guaranteed.

The portion of any financing not covered by the guarantee remains subject to the general risk-weighting rules applicable to credit institutions.

According to the document, the measure in practice allows banks to reduce the capital they are required to hold in reserve against loans falling under the mechanism, lowering the regulatory cost of these operations and creating conditions for greater credit extension to businesses.

The notice, in force since 26 October, amends the Regulation on Mutual Guarantee Societies and the Mutual Counter-Guarantee Fund and revokes a previous provision relating to the prudential framework for guarantees provided by mutual guarantee societies.

The Mutual Guarantee Fund is implemented by Banco Comercial de Investimentos (BCI), Standard Bank and Absa Bank, with financing from the World Bank through an allocation of US$120 million. The mechanism is intended to support 15,000 domestic businesses and contribute to the creation of more than 20,000 jobs.

According to the Bank of Mozambique, the revision seeks to align prudential rules with the evolution of the mutual guarantee system and to reinforce its use as a tool for improving access to financing.

The measure comes in the same week that the central bank approved a special regime allowing banks to deduct a portion of mandatory reserves when extending new credit aimed at import substitution and export promotion.