RBM urges banks to go into remote areas
The Reserve Bank of Malawi (RBM) has asked commercial banks to extend their services to farmers and businesspersons based in remote areas in support of government’s financial inclusion policy.
Speaking when she officially opened Chiringa Agency of the Malawi Savings Bank (MSB) RBM deputy governor responsible for economic services Naomi Ngwira observed that the opening of bank agencies in the rural and hard-to-reach areas can motivate the un-banked population to save their money thereby widening the net of banked Malawians.
Ngwira stated that financial inclusion remains instrumental for the country’s agricultural productivity, promotion of entrepreneurship and creation of jobs and boosting household incomes.
She expressed concern that 50 after the independence, studies still show that only 19 percent of Malawians are formally banked while only 26 percent of the population has access to other informal banking services.
“This means that 55 percent of the population is still excluded,” she explained, adding that government has embarked on a National Identification Registration [NIR] exercise to assist banks in reaching a wide range of customers who might have failed to open bank accounts due to identification challenges.
Ngwira acknowledged that local banks are also operating under challenging economic conditions, which have recently worsened due to high interest rates and depreciation of the kwacha, among others.
She, therefore, hailed MSB for expanding and extending its services into the remotest parts of the country, which underlies [the fact] that the bank has established roots in the banking industry.
Said Ngwira: “Despite operating in a challenging environment, MSB has managed to open outlets in the remotest areas of Malawi. As a regulatory body, RBM will support and create a conducive environment for the attainment of MSB goals.”
MSB chief executive officer Ian Bonongwe said his bank was keen to collaborate with government in ensuring that every Malawi has a bank account by 215.
Bonongwe assured that MSB would commit towards provision of loans to businesspersons and farmers’ cooperatives in an effort to alleviate social and economic challenges among Malawians.
“However, there’s need for mutual trust between us and our customers for MSB to successfully achieve its goals. Our efforts can easily frustrated if the lender-borrower relationship is benefitting only one side. Hence, we’re asking prospective borrowers to abide by the terms and conditions of the loans so that we can move in one direction,” he said.
