President Lazarus Chakwera has called on commercial banks to increase their funding towards agriculture to spur economic development in the country.
Speaking on the sidelines of a private visit to his Lomba Farm in Mchinji District on Saturday, the President said the level of financing by the banks towards agriculture ventures is very low for an agrarian economy such as Malawi.
He observed that banks can be instrumental in financing the growth and development of the agriculture sector.
Chakwera said: “Eight percent of financing by local banks towards agriculture is very low if we are to make meaningful development in the agriculture sector.”
The President disclosed that he grew maize and soya on 350 hectares (ha) out of the 1 000 ha with financing from NBS Bank plc, without which he would not have made the developments he has.
Asked why banks do not seem willing to inject more funding into agriculture, NBS Bank plc chief executive officer Kwanele Ngwenya, who was present during the visit, said there are multiple risks associated with agriculture development in the country.
He pointed out that most farmers rely on rain-fed agriculture and hardly invest in mechanisation, which makes it difficult for them to secure substantial financing.
However, Ngwenya said NBS Bank finances all sectors of the economy, including agriculture.
Chakwera said the reason he visited the farm was to appreciate his own work before he starts crop inspection.
Statistics show that commercial banks financing to the agriculture sector is between eight and 15 percent and the low investment is due to risks associated with farming such as climate shocks and volatile commodity prices.
