Guided by an upward and sustained path in quality, Sofia Cassimo, President of the Women’s Business and Entrepreneurship Department at the Confederation of Economic Associations of Mozambique (CTA) and President of the current Management Committee of the National Federation of Women in Business (FEMME), shares her journey as an entrepreneur in an authentic conversation.
During this interview, she offers a comprehensive view of women’s contribution to Mozambique’s socio-economic development.
Profile Mozambique: Profile has identified you as one of the women who has contributed to boosting the national scene. What can you say about this recognition?
Sofia Cassimo: I think my recognition is valid, but I think it’s also a question of visibility and voice. And this ties in with the theme of the interview or the statement I made about women’s participation in socio-economic development.
I believe that as women, especially women in business, since our independence, perhaps even before, we have always been a very relevant and active part of the economy.
Of course, initially, when we created our country in 1975, there wasn’t this openness in terms of trade and the economy; we were a state in which most of the workforce was associated with the state.
What is noticeable is that 20 years after our independence, also with the economic situation we had, more and more informality is starting to appear in business. And there are various levels of informality. As is the case with moms who make cross-border, or who sell in the markets.
We have this informality, but we also have other informal businesses that take a little more risk, and very early on started traveling to Zimbabwe, South Africa and some were able to go to countries further afield, such as Portugal or England. And some of them, or even many of them, begin to succeed, scale the business in a more structured way, and start earning a larger volume, which then transforms that small activity into a company.
So we can make a parallel analysis with the incentive we have to formalize, and I think that formalizing business in Mozambique is one of the major obstacles we have, in terms of our legal framework and our tax incentive, and this is what leads many people to remain informal, or even some who have already formalized, but who, in a way, have an informal part in their business, which is to balance their expenses and costs.
PM: What can be done to visibly increase women’s participation and contribution to socio-economic development in Mozambique and the region?
SC: Our contribution already exists, but we need to give more voice and visibility to what women are doing. And that is perhaps your role as a media outlet.
On the one hand, I always like to refer to something that few people are aware of, which is an entrepreneurial ecosystem. Many of the entrepreneurs we have in the market think they’re not entrepreneurs, but we’re all entrepreneurs.
In an entrepreneurial ecosystem, there are two factors that are very important. Number one is the entrepreneurial culture and the other factor is the Mass Media. Entrepreneurial culture represents the essence of entrepreneurship. It means having an entrepreneurial profile, entrepreneurial management and also proactive attitudes towards entrepreneurship, essential components for the survival and success of small businesses in a market with so much competition, with such rapid and constant change.
Secondly, Mass Media comes in to give a voice and show the success stories or also show the cases of what didn’t go well, so that other people can learn from it, so to speak.
PM: One of the big issues at the moment in Mozambique has to do with financing, “the cost of financing is very high and inhibits the growth of the primary and secondary sectors, as well as the diversification of the economy in general”. However, what more inclusive financing programs are available to support women entrepreneurs?
SC: In terms of programs, I don’t know many. And I think there have been some very timid initiatives, which have little expression when you look at the results.
For example, four years ago the BNI created the Agrarian Guarantee Fund, and I was part of it, I was even chairman of the committee, where there really was a lot of expression, or the intention was to target women’s businesses. It’s true that the focus was very much on the agricultural value chain, or agri-business. On the other hand, there’s Orange Corners in Mozambique, which is one of the success stories I like to show, how small initiatives have such big results.
Orange Corners is a business incubator founded in Mozambique by the Embassy of the Kingdom of the Netherlands and IdeaLab, in consortium, and with a few other partners, such as Vodacom, M-Pesa, at the time Banco ABC was also involved, now Standard Bank is, etc. So it’s a group of partners who also support the initiative.
And what we want to do there is activate young people for this career, in short, or entrepreneurial journey, which are the pre-incubation programs we have there, and then there’s the incubation program itself, which lasts six months, where, during the duration of this incubation program, young people have access to a grant of 750 euros for them to formalize or make some kind of direct investment in the business and that allows them to take the first leap in growth.
Later, when they finish this incubation program, they have access to the Orange Corners Innovation Fund, which for each year, 20 of these businesses are selected, then I also declare that they are already formalized, with some kind of more substantial sales volume, they have access to another type of funding ceiling, where 60% is subsidized and the other 40% they have to return at an interest rate below 10%.
And here the financing ceiling goes up to, I think, 15,000 euros. What has this shown? They’ve already done two funding cycles, haven’t they? And one of the implementing partners here is also GAPI, which is the partner that then manages the fund. And this shows that, in fact, with low interest rates and with amounts that are really manageable within the debt capacity of a small business, it is possible for us to finance and grow an entrepreneurial ecosystem.
On the other hand, GAPI also has other initiatives, which they have done in the same way. AMBA too, which is the Mozambican Association of Business Angels, has also had some kind of initiatives. But the big problem here is that we still have to educate our business community, which is more advanced, so to speak, that this is something that applies to them too, in other words, that it’s worth investing in these businesses, and it’s worth taking the risk.
PM: Has the national business community been able to make good use of the various funding programs and funds, with a view to increasing its competitiveness?
SC: In this context we have to make an analysis at various levels. For example, the Secretary of State for Youth and Employment (SEJE) has launched a program that is proving to be very successful, EMPREGA, which will reach more than 1,500 young people in Mozambique, and is already in its second phase, with subsidies of up to one and a half million meticais, in other words, we have an initiative on the part of the state, our government, which is directly financing these businesses, and that is a good indicator.
And I think it’s important to think that even abroad, in other more developed ecosystems, they are going through challenges, so it’s important to instill in our minds that if I invest in 100 businesses, possibly out of 100, only 20 or 30 will actually grow over a five-year horizon.
Another example to consider is the Startup Acceleration Program developed by Standard Bank, it was the first time a bank had given grants of that magnitude, I think it was 9 or 7 million. But all this, when we check the sample, compared to the number of companies we have, which the National Statistics Institute tells us, the number of companies we have registered in the country, doesn’t even reach 5%. That’s very little.
Then there are the financing statistics provided by the commercial banks. But I strongly believe that if we compare the four largest national banks, who are the people who are able to access credit, or the companies that are able to access credit, we will have a group of 150, 200 companies that are the same. Because it’s very difficult to meet all the criteria that banks demand of us nowadays.
PM: In terms of investments, what do you think should be the main points of attention for investors this year?
SC: I think this is an atypical year. And not just talking about the political issue of the elections, we have a lot of things happening around the world.
And this will have a knock-on effect for us. It’s a year in which we have to be very concerned about guaranteeing the operation we have in our businesses, but at the same time it’s also a year of opportunity. Opportunity in the sense of being able to read how the market is behaving.
The country is changing and is increasingly open. We have more and more foreign investors visiting the country.
We have an increasingly robust pool of entrepreneurs. We also have, in a way, more supply for entrepreneurs. So we are transforming our market here, in a way.
And there are many young or recent initiatives with a lot of commercial value and growth potential. We’re at a time when those companies or investors who really aren’t afraid to take a risk, it’s a time to take that test.
PM: What is the “appetite” of foreign investors and companies for the Mozambican market? Please give concrete examples of existing investments/business transactions.
SC: It’s important to mention that agriculture and tourism have also been sectors with a lot of investment. I’m also referring to tourism in the context of the cultural and creative industries, which is a set of opportunities that we increasingly need to capture and know how to capitalize on.
Industries such as mining and quarrying are high value industries, but they are also high risk.
And perhaps we don’t give ourselves the opportunity to show what can be invested more in our country. And when I say agribusiness, it’s not just about production. It’s being in the export part, it’s being in the packaging part, it’s being in the processing phase.
We have PRONAI, which is the National Industrialize Mozambique Programme, which I think is going to gain a lot of momentum this year.
We have the Millennium Challenge Account, which is about to start its project, and this will bring another dynamic to the north-central region. And I really like the fact that we’re decentralizing investments.
Sofia Cassimo is also Chapter Head for WIB-Mozambique, which is African Women in Business, an African organization that emerged from the SADC Business Council to focus more on women’s issues or businesses, but with a special focus on the area of trade and also Lead Catalyst at Idealab and founder of Samsara.
