RBM, Misalico join forces for financial literacy boost
The Minority Shareholders of Listed Companies (Misalico) has partnered with the Reserve Bank of Malawi (RBM) to provide financial literacy. Local economic and financial analysts have hailed the training for providing information people need to survive the hostile economic environment.
A letter seen by Weekend Nation dated August 6 2024 shows that the central bank agreed to partner with Misalico to provide financial literacy services to local and religious leaders and the heads of education institutions.
“We have reviewed your submission and are pleased to inform you that the bank is ready to partners with Misalico towards the implementation of the capital markets financial literacy initiatives targeting local and religious leaders, ward councillors, heads of educational establishments and members of selected churches,” reads part of the letter signed by RBM governor Wilson Banda, who also doubles as the registrar of financial institutions.
Misalico secretary general Frank Harawa confirmed the development in an interview yesterday. He said the proposed training will prepare Malawians to invest in the stock market, particularly now that the central bank is preparing to list two mining companies on the 16-counter Malawi Stock Exchange (MSE).
“The stock market is an incredible opportunity for Malawians to generate some revenue on the stock market,” he said. “We noted that financial literacy was incredibly low in Malawi, people don’t know they can earn a passive income while they sleep by buying and selling shares. This training will improve awareness and prepare them for investment.”
The Misalico general secretary was referring to an agreement signed by the Ministry of Mining that would require mining companies to list on the MSE as part of a broader strategy to increase local participation in the sector.
Reacting to the development, Old Mutual financial education manager Bernard Chiluzi said the training will help Malawians cope with an unforgiving economic environment characterised by devaluations, currency depreciation and inflation.
“The stock market provides a unique investment opportunity outside of traditional saving instruments available to most Malawians,” he said. “When a person saves in an ordinary savings account, their money loses value to inflation, but with shares, there is a chance that the shares will rise in value and investors can also get the return on investment [or dividends].”
Figures from the National Statistical Office show that inflation is currently at 39 percent while local commercial banks are offering interest rates on savings of between six percent and 11 percent, representing a spread of 33 percent to 28 percent. Essentially, this means money held in ordinary savings accounts loses money to inflation at a higher rate than it gains from interest rates.
In an earlier interview, Sycamore Consult Limited founder and personal finance management expert Audrey Mwala urged local investors to invest in the stock market because it usually provides a better return on investment in the long-run.
“The stock market fluctuates
but if you check the trends, it always curves upwards. So, it is one of the best instruments for long-term investment,” she said, echoing Chiluzi’s statement.
The Misalico-RBM partnership is a vital step in enhancing financial literacy in Malawi. By offering targeted training, this initiative aims to empower Malawians to make informed financial decisions and capitalize on investment opportunities. This is crucial for promoting economic resilience and growth in the face of ongoing challenges
