Financial Crime World

Mozambique: Statutory Business Conduct Requirements Need Stronger Enforcement

Unfair Practices by Financial Institutions Leave Consumers Vulnerable

MAPUTO - Mozambique’s regulatory bodies have failed to enforce statutory business conduct requirements, leaving consumers exposed to exploitation by financial institutions. A recent report highlights the need for stronger enforcement of Law 22/09, which entitles consumer associations to operate and protect consumer rights.

Failing to Honor Obligations Under Law

According to the report, consumer associations are not receiving the support they need from the state and local municipalities as required by law. The State and local municipalities have obligations to:

  • Provide assistance
  • Support initiatives
  • Create consumer education centers

However, these obligations are not being honored, leaving consumers without adequate protection.

Strengthening Institutional Arrangements

The report recommends establishing a new financial consumer protection unit within the Bank of Mozambique (BdM) to monitor, supervise, and enforce consumer protection provisions. Additionally:

  • The Banking Supervision Department (BSD) and General Inspectorate of Banking and Insurance (GPI) should strengthen their roles in financial education and consumer complaints
  • A designated team within each supervisory division responsible for financial consumer protection would be helpful

Establishing a Consumer Protection Task Force

The report suggests establishing a consumer protection and business conduct task force to bring together key stakeholders, including:

  • Heads of department from GPI and BSD
  • Representatives of consumer associations

This task force would help ensure that all parties are working together to protect consumers and promote a stable and sustainable financial system.

Conclusion

With Mozambique’s banking sector facing numerous challenges, including high levels of financial exclusion and low financial literacy among consumers, stronger enforcement of statutory business conduct requirements is crucial. By implementing the recommendations outlined in this report, Mozambique can take a significant step towards protecting its consumers and promoting a stable financial system.