FARE has already approved proposals to that end, presented by a number of banking institutions.
The institution's chairperson, Martinho Fernandes, said that "many institutions are prepared to operate in the rural areas, and after analysing the proposals, more than 10 districts were selected for the establishment of bank branches, and FARE will support this move".
He was speaking during a National Seminar on Local Economic Development held in the central port city of Beira.
The meeting also concluded that most banks are now prepared to operate in towns and districts in the central and northern regions of the country, which represents a new trend, contrary to the previous tendency of concentrating the vast majority of banking business in the major cities of Maputo, Matola, Beira, and Nampula.
This new trend follows strong pressure by the Bank of Mozambique to persuade commercial banks to decentralise their activities.
The central bank's rules have been adjusted to make it more attractive to establish banks outside of the main cities, eradicating the idea that it is risky to invest in rural areas.
The 34.2 million dollars has been available since 2003 and it has been contributed by the Mozambican government, the International Fund for Agricultural Development (IFAD), and the African Development Bank (ADB).
The FARE project includes components such as policies, legislation and institutional support, credit, innovation and expansion, and also support for community financial institutions.
Of the available money, nine million US dollars have already been used in a project with an eight year cycle.
So far, only 28 of the 128 districts in the country have bank branches.
FARE was created in 1992 with the specific mission of supporting rehabilitation and development of the national economy, particularly in the rural areas.
SOURCE: AIM
