RBM wants banks to support economy’s quick recovery

The Reserve Bank of Malawi (RBM) has urged commercial banks to support the economy’s quick recovery by making resources available to productive sectors.

RBM Deputy Governor Grant Kabango said this in an interview on Monday at Sunbird Nkopola Lodge in Mangochi during the opening of the 6th Annual Lakeshore Conference of the Institute of Bankers in Malawi (IoB).

He said the country’s economy is not in a good shape due to Covid-19, high inflation rate and continued importation of goods.

Kabango called on banks to come in and create some levels of resilience to the most productive players or sectors in the economy.

He said: “The turbulent environment created by Covid-19 has greatly affected our economy. Instead of realising economic growth, we have seen our economy tumbling.

“Again, our economy has also been affected by high inflation rate and lack of forex due to continuous importation of agricultural inputs, fuel, medicines apart from other traditional imports. Therefore, as banks, we need to find means of addressing all these challenges in the medium to long-term.”

Kabango cited financing of agriculture, mortgages and industrialisation as some of the areas which the banks need to focus on to grow the economy.

“If the banking industry is to lead the renaissance of this country as the theme indicates, there is a need to ensure that the banks financial innovations support crucial areas as outlined in Malawi 2063,” he said.

Kabango advised banks to enhance financial inclusion, saying people in the countryside need to have access to banking services.

Kabango said the central bank is committed to support the banks through the introduction of frameworks that are conducive to their work.

He also said RBM is working hard to maintain favourable macroeconomic conditions in the short to medium-term and called for support from banks.

IoB Malawi chairperson Zandile Shaba pledged to continue to play a pivotal role in financing businesses, small medium enterprises and projects to help improve the country’s economy.

“The operating environment is tough, but as banks we need to identify and explore measures that we can do to help our customers, including supporting activities in Malawi 2063,” she said.

Shaba called on fellow bankers to take the lead in economic renaissance path by being focused, ensuring proper planning and development of mindset change.

The conference, which started on Sunday, was held under the theme: Leading Malawi’s Economic Renaissance: Tuning in to the Malawi 2063.