Malawi Agricultural and Industrial Investment Corporation (Maiic) has unveiled a $24 million (about K42 billion) Blended Rural Finance Facility to expand access to affordable financing for rural businesses and economically active beneficiaries nationwide.
Maiic managing director Taz Chaponda said in an interview on Friday that the facility is designed to channel affordable financing to rural enterprises through participating financial institutions, including commercial banks, development finance institutions, microfinance institutions and savings and credit cooperatives.
He said: “Maiic is not lending directly to the final beneficiaries under the Blended Rural Finance Facility.
“Instead, it is providing wholesale financing to eligible participating financial institutions, which then assess and lend to qualifying rural businesses.”
Chaponda said that as of September 30 this year, about K27.34 billion, representing 65 percent of the facility’s total package has been approved or committed to 26 participating financial institutions.
“Actual disbursements to these institutions stand at about K5 billion while 13 institutions have received funding,” he said.
Chaponda said the facility’s latest position at the beneficiary level have reached about 2 714 beneficiaries and deployed about K2 billion.
“The facility is prioritising rural economic activities, including agriculture and its value chains, rural micro, small and medium enterprises, women and youth-led businesses and other eligible income-generating activities,” he said.
Agriculture economist Gresham Kamnyamata said in an interview that the facility will help to improve agricultural productivity by supporting crop and livestock farming, increasing household production and raising farmers’ incomes.
“Farmers should have access to loans at low interest rates so that they can increase production, improve their incomes and help Malawi become self-reliant in food production,” he said.
Kamnyamata urged Maiic to strengthen access to affordable credit and ensure the facility delivers tangible benefits to rural communities.
Maiic was established after the Malawi Government commissioned a feasibility study in 2013, which showed that there was a great need for the establishment of a development financial institution in Malawi.
The study found significant financing gaps particularly in infrastructure development and small and medium enterprises .
Maicc works in collaboration with existing banks and financial institutions and is a source of capital for the underserved sectors of the economy to accelerate the country’s economic growth and development.
