CRITERIA DEFINED FOR ACCESS TO URBAN POVERTY FUND

The Mozambican government on Tuesday approved the criteria and procedures for access to a fund of 140 million meticais (4.5 million US dollars) set up to finance the Urban Poverty Reduction Programme (PERPU).The programme has two major facets. The first is job creation, including the informal sector, small and medium companies, labour intensive services, and improving the business environment, while the second is social protection for the vulnerable strata of the population.Speaking to reporters after a meeting of the Council of Ministers (Cabinet), the Minister of Planning and Development, Aiuba Cuereneia, said that, in the initial phase, the programme will cover Maputo city, and the ten provincial capitals. The fund will be managed by the Municipal Councils.The fund will be divided into a fixed slice of seven million meticais per municipality and a variable slice depending on the size and population of each city, the incidence of poverty in each municipality, and the level of municipal revenue.Applying the government’s formula to the largest cities, this year Maputo will receive 20.7 million meticais, Matola 19.1 million, Beira 14.9 million, Nampula 14.4 million, Quelimane 10.4 million and Tete 9.9 million.Like the District Development Fund for the countryside, this fund will be available for citizens who present viable projects. In particular, the target groups include young people, vulnerable women and widows, and the disabled (if they are still able to work), who have no access to formal funding sources such as banks. People applying for money from the fund must be Mozambican citizens resident in the municipality, and regarded as suitable persons by the local administrative and community authorities. They must also have a tax number (NUIT), since the projects financed by the fund must pay taxes.Associations and small companies can also apply for funding, in which case they must be legally registered. Cuereneia explained that this is to prevent individuals setting up phony associations merely to obtain the money and then disappear. At least 25 per cent of the members of any beneficiary association must be resident in the municipality.The areas eligible for funding including agriculture, fish-farming, the production of clothing, footwear and furniture, electrical workshops, small building companies, and he collection and recycling of garbage. Cuereneia stressed that the fund must not be used to finance cross-border trade, the production of alcoholic drinks, scholarships, the acquisition of vehicles, furniture, books or clothing for personal use, or the building of infrastructures such as schools, health posts, roads or houses.The money is not a grant but a loan and must be repaid at interest rates that will vary between one and three per cent, depending on the nature of the activity.Applicants must present their projects to the Consultative Council of their administrative post. This will analyse the projects before submitting them to the municipal council.Asked what would happen to lenders who fail to repay the loans, Cuereneia promised that “coercive measures” would be taken against them. The contracts signed with the beneficiaries will stipulate repayment periods. “If someone refuses to repay”, said Cuereneia, “he may face criminal proceedings and go to jail”.