In a unique ‘transplant operation of the traditional into the modern’, the Institute of Cereals of Mozambique (ICM), has signed a collaboration agreement with FinComEco, for the creation of a Joint Venture (JV), that will service, finance, capacity build and enable digital-technology solutions in the country’s agriculture sector.
The agreement was signed in the presence of Rt. Hon Mr Ernesto Max Elias Tonela, Mozambique Minister of Industry and Trade, by Mr. João Macaringue, Director General, ICM, and Mr. Hirander Misra, Deputy Chairman of FinComEco.
ICM is Mozambique’s regulatory body and also acts as the promotional arm, under the Ministry of Industry and Trade that oversees all activities of agricultural production and commercialization.
The agreement brings the two working partners to closely plan and implement an operational system that will link agriculture to the latest financial technology, for the first time in such dynamic proportions.
The collaboration will develop a range of projects and high impact initiatives in the agricultural commodity markets sector.
ICM, with its Mozambique domain knowledge, country-wide network of warehouses facilitating smallholder farmers, traders and buyers, will deliver commercialisation and operational capabilities.
FinComEco will provide the commodity trading platform and electronic warehouse receipts capabilities, as part of the wider FinComEco model.
The Fintech feature will include distribution of third party agri-finance and electronic banking facilitation enabled by scalable technology.
The system support will be offered by FinComEco’s partner, GMEX Group.
The primary objective of the joint venture will to create a food reserve, capable of filling the national deficit, and is being seen as a priority initiative of the Government, for the welfare of the people of the Republic of Mozambique.
Both the parties will work in one accord towards improving food security, economic diversity and financial inclusion through a socially responsible commercial delivery.
A Special Purpose Vehicle (SPV) has been created under the title, FinComEco Mozambique SA, with FinComEco holding majority shares and local partners sharing the rest of the stake. GMEX Group has also acquired 10% stake in the venture.
The areas to be addressed by the SPV shall be the legal and regulatory framework, effective standards, technical assistance and capacity building in the agro sector.
The JV will work along with other industry stakeholders including development organizations, government bodies, research institutions and the private sector.
“The implementation of the Operational Plan for Agricultural Marketing (POCA) will deliver on the Presidential initiative to increase production and productivity, for the benefit of our population, achieving a sustainable agricultural sector.”, said João Macaringue, Director General of ICM.
“The signing of this agreement provides a solid response to supporting POCA and solving the problem of abstraction, transport, storage and distribution. The involved industries will also record all production, whether domestically consumed, exported or stored in reserve for national food security.”, he added.
Hirander Misra, Founder and Deputy Chairman of FinComEco and CEO of GMEX Group commented, “This high impact initiative in Mozambique will facilitate the effective linking of the supply to demand agricultural value chain enabled by best-of-breed technology, standards and inputs (including seeds, fertilisers and pesticides).”
In his opinion, “This, coupled with a unique agri-finance business model to solve credit and financing issues underpinned by improvements in logistics and warehousing, will help improve food security and encourage value added agricultural industries and wider trade.”