The Reserve Bank of Malawi (RBM) has urged financial institutions to make available loans to small and medium enterprises (SMEs) to boost their their businesses.
The central bank’s executive director responsible for regulations Patrick Mhango said this on Friday during the Malawi Microfinance Network annual lakeshore conference in Mangochi District.
He said: “SMEs make up 90 percent of the business population and they significantly contribute to the nation’s gross domestic product.
“Therefore, if they can be supported with loans, they can have thriving businesses and transform the country.”
Mhango said the country’s SMEs face numerous challenges such as lack of collateral , inadequate capacity and lack of corporate governance.
“Most of the SMEs do not have fixed assets that can be used as collateral, they don’t capacity to present concepts or business plans,” he said.
Mhango indicated RBM’s commitment to partner with Malawi Microfinance Network to help SMEs access finance.
In his remarks, Malawi Microfinance Network board chairperson Elias Kafinyangwe said they will continue to provide customised financial solutions to SMEs, particularly those in the agricultural sector.
“This initiative aims to address the specific needs and goals of SMEs, recognising that Malawi is an agriculture-based economy and most people are engaged in agriculture-related activities,” he said. The conference was held under the theme: ‘Inclusive and sustainable financing for SMEs: Catalysing agriculture commercialisation in Malawi’.
