Consumer complaints in the financial sector increased 38 percent in 2023 to 700, with pension sector registering the highest number of complaints at 380 or 54 percent of the complaints, the Reserve Bank of Malawi annual report shows.
The report further shows that half of cases border on poor customer care and financial abuse.
The RBM says it handled 700 financial consumer complaints, out of which 227 were resolved, representing 32.4 percent. In the previous year, the central bank handled 432 complaints, with 221 being resolved, representing 51 percent.
Reads the report: “Out of the resolved complaints, 36 percent emanated from misunderstandings between financial institutions and consumers. Financial abuse and poor customer care accounted for 30 percent and 23 percent, respectively.
“The pension sector registered the highest number of complaints at 380 while the insurance sector registered 124 complaints. Microfinance and financial cooperatives, and the banking sectors had 104 and 87 complaints, respectively.”
Mobile network operators recorded four complaints while capital markets registered a single complaint, according to the report.
Meanwhile, it was observed that out of the 380 complaints received from the pension sector, 200 related to non-remittance of pension contributions, while 60 were due to employers refusing to facilitate payment of pension benefits.
In an interview on Wednesday, Malawi Congress of Trade Unions (MCTU) president Charles Kumchenga said most of the challenges being faced are outstanding, stressing that apart from pension issues, some cases are to do with financial inclusion as less privileged customers are not treated well.
He said: “As MCTU, we have repeatedly spoken on the same. Workers, especially those in the lower wage bracket, complain of not being well assisted and in some cases excluded from financial services.
“Financial institutions must design context -specific services that will cover the less privileged workers or Malawians.”
In a separate interview, Consumers Association of Malawi (Cama) executive director John Kapito attributed most of the complaints to financial institutions’ negligence.
He said: “Apart from the RBM registering complaints, Cama has also registered many complaints and most of them are as a result of negligence by financial institutions.
“The banks have developed a negative attitude towards consumers. They can even close your account if you complain.”
Employers Consultative Association of Malawi executive director George Khaki said in an interview employers are struggling because of the economic environment, resulting in some not generating enough revenue to meet their obligations, including pension.
He said employers are finding it hard to balance, but when revenues improve, they prioritise paying current pension obligations and pension arrears.
“If any pension payment is due, companies look for resources to pay off the maturing pension dues,” he said.
In the first half of 2024, employers have not remitted pension funds in excess of K50 billion, according to RBM data.
