The Financial Needs & Risks of the Microentrepreneur in Maputo, Mozambique

This report presents findings of a study that examined the needs and financial risks of microentrepreneurs working in the informal markets of Maputo, Mozambique.

The most pressing need of microentrepreneurs is access to working capital. Other findings include:

• Business owners look for opportunities to diversify their products, make new purchases and expand their businesses;
• In terms of payment preferences, most vendors favor credit through a financial institution;
• Participants want full understanding and flexibility from the institution;
• Savings are perceived as a short-term way to manage household expenses, personal salaries and child education;
• Most markets still use traditional savings practices such as the Xitiques or Rotating Savings and Credit Associations;
• Long-term savings is limited to informal group savings such as a family fund.

The paper recommends that the microfinance industry should continue the mix of offering business training to new clients, pushing for market commission and government regulation of new entrants, and providing women-specific training on household financial management. Development of the industry's long term group savings programs and savings mobilization within the informal markets will support new MFI savings initiatives within Maputo.