The Reserve Bank of Malawi (RBM) says it is reviewing Islamic finance guidelines to strengthen the regulatory and supervisory framework as the country explores alternative sources of development financing amid mounting economic pressures.
Speaking during the opening of a three-day International Islamic Finance Conference in Blantyre on Monday, RBM director of banking supervision Chimwemwe Kachingwe said the central bank issued guidelines in 2017 and has since facilitated the introduction of Islamic banking services, with Malawi Stock Exchange-listed FDH Bank plc currently offering them through a dedicated window.
She said: “These are the conversations that we need to be having as we are thinking of embracing Islamic financial services.
“We already have guidelines on Islamic financial services to the extent that we have at least a bank that is offering the financial services because we have created that enabling framework.”
Kachingwe indicated that the existing Islamic banking window has a K50 billion financing capacity, mainly being tapped by the manufacturing sector, highlighting the potential for such products to support businesses and investment.
The review of the guidelines comes as Malawi faces an estimated annual financing gap of $3.3 billion (about K5.8 trillion) by 2030, according to the African Development Bank, with the shortfall equivalent to 58 percent of the K10.9 trillion 2026/27 National Budget.
The financing challenge is compounded by declining foreign aid and mounting public debt, which reached K23.9 trillion, equivalent to 90 percent of gross domestic product, as of December 2025 while bilateral aid to the region fell by an estimated 16 to 28 percent in 2025, according to the International Monetary Fund.
Takaful LDC Malawi founder and managing director Adilu Chirungu said the slow uptake of Islamic finance reflects the need to establish appropriate products and strengthen awareness, expertise and collaboration with regulators.
“We are trying to make sure that we do it right the first time,” he said, adding that the organisation is working with the RBM and financial institutions to build the capacity required for sustainable growth.
Chirungu said growing interest from commercial banks and insurance companies attending the International Islamic Finance Conference in Blantyre offered encouragement although the pace of expansion will depend on institutions introducing the products correctly.
Meanwhile, Absa Bank Kenya plc head of islamic banking Tego Wolasa said Islamic finance can expand financial inclusion by serving people who avoid conventional banking for religious reasons while attracting investment from the Middle East and other markets.
He tild the conference that Malawi can mobilise domestic and foreign capital for infrastructure development through Islamic bonds, which allow investors to participate in asset-backed projects.
Chirungu, who is also BTI College and BTI Advisory founder, stressed that appropriate regulations, capital-market provisions, training and public awareness will be essential.
In an earlier interview, FDH Bank plc head of corporate banking Kawawa Msapato described its Salama banking or Islamic banking experience as phenomenal, saying it is targeting people that prefer Shariah-compliance banking solutions.
He touted the Islamic window for registering thousands of customers and the transactions are in billions of kwachas.
FDH Salama Advisory Committee chairperson Sheikh Ibrahim Lethome is quoted as having described the experience as exciting, but highlighted the need for training of human resource to ensure that bank staff have relevant knowledge on Islamic banking.
“We need more legal reforms to support the sector because we need to have laws that when there is a dispute within Islamic banking transactions, we should be able to resolve them,” he said.
Lethome, a Kenyan, said if local banks can utilise such Islamic banking window, a full-fledged Islamic bank could be introduced in Malawi, adding that his country has three islamic banks that are thriving.
