Bankers challenged on financial inclusion
Commercial banks in the country have been urged to intensify efforts in championing the national financial inclusion agenda.
Institute of Bankers (IoB) Chief Executive Officer, Lyness Nkungula said recently that financial institutions have a pivotal role to play in achieving the plan.
This comes as over 70 percent of the country’s population has no access to formal banking services.
For some time, commercial banks have been blamed by commentators for what they call putting other circles of the society, especially those in rural areas, out of the equation.
In the National Strategy for Financial Inclusion 2016- 2020, the Ministry of Finance set an ambitious target to increase delivery of financial services at affordable costs to low-income segments of the society from 34 percent to 55 percent by 2020.
Among other things, the strategy sought to increase access to formal loans from 270,000 Malawians to 400,000 as well as reduce the average cost of using a bank account from 17 percent of monthly income to five percent.
Addressing delegates to the bankers’ dinner last week, Nkungula said the country is moving towards the right direction but more needs to be done.
“Financial inclusion is very important. For the economy to grow, we need more people that can make savings and translate those savings into investment,” Nkungula said.
Bankers Association of Malawi president, Kwanele Ngwenya, said commercial banks are working together in ensuring that most Malawians are brought on board.
“The policy makers in Malawi too like government and the Reserve Bank of Malawi, had an early realisation about the implications of poverty for financial stability and have endeavored to ensure that poverty is tackled in all its manifestations and that the benefits of economic growth reach the poor and excluded sections of the society,” Ngwenya said.
Commercial banks remain the largest providers of financial services, accounting for more than 50 percent of the total financial assets, 92 percent of total credit and 89 percent of total deposits.
However, access to finance remains one of the major obstacles to doing business in Malawi.
A recent study by Finmark Trust, an independent non-profit trust, observed that Malawi seems to be on its way to achieving its vision of creating infrastructure through partnerships to enhance the quality and depth of the country’s financial inclusion.
