Mozambique has transformed from a basket case to one of the world’s most rapidly expanding economies, with growth expected to average around 8% a year between 2012 and 2016.

Much of Mozambique’s future growth will come from its nascent coal and natural gas industries. Mozambique’s Tete Province, situated in the centre-west part of the country, has some of the world’s richest coal reserves. Mining companies operating in the area include Rio Tinto as well as Brazil’s Vale.

There have also been numerous new natural gas discoveries in northern Mozambique’s offshore gas fields. US-based Anadarko Petroleum and Italian oil and gas company ENI, have both recently announced significant gas discoveries in their respective blocks. These discoveries are important because of the size of the reserves as well as Mozambique’s relative proximity to markets in Asia. “This is rather close to the largest potential market for liquefied natural gas (LNG), which is Asia. It is easier to export from offshore Mozambique to Asia than it is from many other places,” Adi Karev, global oil & gas leader at Deloitte Touche Tohmatsu, told How we made it in Africa in an interview earlier this year.

One man that has a good vantage point of Mozambique’s changing fortunes is Ranjith Balliram, the chief executive of South African bank FNB’s Mozambican unit.

“There is a lot of optimism in the air,” said Balliram in an interview with How we made it in Africa. However, he noted, the challenge will be to ensure that the revenues generated from the coal and gas industries trickle down to ordinary Mozambicans.

Balliram has spent his entire career with FNB in neighbouring South Africa. More than 20 years ago he started in an entry level administration position earning a very low salary. Since then he has moved up the ranks, working in various divisions of the bank. Balliram has been based in Mozambique’s capital Maputo for the past year.

FNB has been operating in Mozambique since 2007. While FNB is one of the ‘big four’ banks in South Africa, it is only a mid-tier player in Mozambique, which has a total of 18 banks.

Balliram reckons there are enough growth opportunities for all the players in Mozambique’s banking sector. “I personally think there are opportunities for all of us in this market. Whether it is on the business side, whether it is on the retail side, on the corporate side.”

He says that Mozambique’s banking industry is less sophisticated than that of South Africa. “Mozambique is definitely progressing forward, but I still feel they are perhaps a couple of years behind to where South Africa currently is.”

According to Balliram, new companies are being created to service the large mining and gas firms. This also provides opportunities for FNB. “It is companies that are now being formed to service the big mining houses, to service the Vales, the Anadarkos, the ENIs. So you are getting a lot of downstream operations that are coming about now.”

Balliram said that although Mozambique’s SMEs hold potential for FNB, a lack of collateral often makes it difficult to lend to these businesses. “It is an opportunity, but it is also a challenge … The SME sector is growing, but there is still caution in terms of the amount of money that you can actually lend into that area.”

In South Africa, FNB has been one of the leaders in introducing online and electronic channels to service its clients. Will the bank be going the same route in Mozambique, or is there still a focus on rolling out physical branches?

“It is a combination of both at this moment in time. Mobile banking is relatively new to this market. Because we are still expanding and growing this market, we are still going the route of bricks and mortar, because we want to get to a stage where we have representation throughout the country. So we will continue doing that, but we are introducing more electronic products and solutions into this market, because you are finding that the general consumer is getting more educated when it comes to internet banking, cellphone banking, etc. So our strategy will be aligned to what you are seeing in South Africa in terms going the electronic route, but … we are still behind at this moment in time,” Balliram explained.