There is no shortage of cash or credit in Angola -- Africa's second oil producer -- but the struggle small businesses face to get loans is stimying efforts to diversify the economy. According to the central bank there was more than $22 billion in credit issued in Angola last year, around a fifth of total economic output. A fledgling banking sector, prodded by the government to make loans available for businesses not related to the energy sector, is starting to take flight. The volume of credit grew by 25 percent in the year to June 2012 alone. With the economy growing at 10 percent the services, construction and mining sectors have been major beneficiaries, according to a recent report by consultancy firm Deloitte. But all is not going to plan. "Officially the amount of credit has increased," said Justino Pinto de Andrade, an economics professor at the Angolan Catholic University and an opposition member. "But just talk to business owners, they will tell you about the difficulties they face in funding projects." Efforts to kick-start sectors like agriculture that have remained dormant since Angola's 27-years of on-off civil war that ended in 2002 have faltered. Forty-eight-year-old Chimbili Henriques, a member of the agriculture cooperative Africole based in the southern province of Huambo benefited from a previous round of lending. "We received a credit line from the government, which allowed us to borrow from a local bank for nine months and then pay back for the following nine months," said Henriques. "But it was stopped in 2006 and since then things have been very hard." "We tried to negotiate credit leveraged on the cooperative's funds and our own assets, but the banks refused, saying we did not have sufficient collateral or discouraging us with overly bureaucratic procedures." Henriques's story is not unique according to many observers. "The issue of credit continues to be the Achilles heel of our economy," said Jose Severino, president of the Industrial Association of Angola. Whatever the industry, providing collateral remains difficult in an economy where most of the population makes a living in the informal sector. The majority of Angolans live on less than $2 a day and only 20 percent have a bank account, according to a study by the African Development Bank. Unsubsidised interest rates can run at 18 percent according to the latest World Bank figures, making good collateral a sine qua non for banks. "The banks' demands -- high monthly payments and repayment in a short time -- are impossible to meet for most people," lamented Emilio Manuel, a 42-year-old Luandan who tried in vain to get a loan for an apartment. Banks also complain that a lack of training has resulted in low quality loan applications. "Since the launch of (the government-backed loan guarantee programme) Angola Investe, we received sixty proposals and we approved eight projects," said Emidio Pinheiro, chairman of BFA, the country's second largest private bank. But the government is confident progress will be made, despite the setbacks. "We are far from an ideal situation, but we have made great progress in recent years," said Jacinto Domingos Ferreira of the Ministry of Public Administration.