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Banking hall in a pocket

GROWING—A graph shows number of subscribers

NKUNGULA—The partnerships have widened our
reach

By 2020, more than 80 percent of Malawi’s population, which is about 15 million of the 18 million people, was leaving in the rural areas according to the World Bank.

The Bretton Woods’ institution also ranks Malawi among the poorest in the world, which essentially means the inequality gap in Malawi is equally wide.

The poor of the poorest are left out off the financial equation.

However, not everyone in the rural area is cut out. Despite being rural shows the essential services such as health and education, which are provided by financially capable individuals.

One of such is Dyna Kananji, who works as a Health Surveillance Assistant (HSA) at Mbalama Health Centre in the lakeshore district of Mangochi.

Kananji is on government payroll, which obviously means she should have a bank account and she chose FDH Bank.

She would have been lucky if she lived at Ntaja, a one hour drive from Liwonde because the area has FDH Bank Pakhomo branch, a mobile banking agency where almost all the bank’s services are provided.

However, Kananji stays in Masanje, an hour away from Ntaja and a 30-minute drive from Nserema, the closest trading centre.

“From Masanje to Nserema I use a bicycle which costs K3, 000 to and from the place and then board a car to Ntaja, which, again, costs me close to K7, 000 to and from the area which means I spend more to access banking services,” she said.

However, the partnership between FDH and Mobile Network Providers’ mobile money services brought her relief.

“I just transfer my salary to TNM Mpamba and withdraw it at Nserema, which means I spend less than K5, 000 and we are only talking about withdrawal but, once I transfer the money, I can do anything with it that is similar to banking transactions,” she said.

Kananji is one of the Malawians who would have been excluded from the financial and economic equation and their only sin being living in the rural area where banks cannot place their branches.

The evolution of technology, especially on mobile systems of payment, has provided platforms for people to have affordable and secure means of having financial services.

Mobile money services have grown since their introduction in the country and their penetration is fast increasing.

According to a 2021 second quarter National Payment Systems report from the Reserve Bank of Malawi, the number of registered subscribers for non-bank mobile money services increased by 7.5 percent to 9.3 million (half of Malawi’s population) as at the end of June 2021.

The report further indicates that the number of mobile money agents rose by 36.9 percent to 115,435 as at end June 2021.

“This outturn is commendable as it in essence increases the number of access points for mobile payment services across the country,” the report reads.

This clearly shows that, through the partnerships, banks whose customer base hovers at five million, are able to connect people who would have been excluded from the financial inclusion drive.

Bankers Association of Malawi (Bam) says banks engaged MNOs in a bid to expand the reach and uptake of financial products among underserved people by supporting the development of a digital financial ecosystem.

Bam Chief Executive Officer Lyness Nkungula believes that failing to digitise the broader ecosystem creates bottlenecks within digital financial transactions that will slow the adoption of digital financial services, hence slowing down the financial inclusion agenda.

Nkungula added that the financial inclusion drive is more of social-economic agenda that needs partnerships, as banks cannot do it alone, and it needs massive digital transformation and this transformation needs critical partnerships.

“Access to regulated, sustainable financial services can help people make productive economic choices for their families, their businesses and for the future. For society, as a whole, it contributes to inclusive economic growth,” she said.

One of mobile network operators, Airtel Malawi, has Airtel Money as its mobile money payment system and has also gone into partnerships with a lot of banks in a bid to bring banking services to their pockets.

Airtel Money Director Brighton Banda said, collaborating with other institutions, including banks, brings financial services closer to Malawians.

“Through system interoperability between banks and Mobile Network Operators (MNOs) like us with a robust agent network, more Malawians now have access to financial services, thereby driving our quest for more inclusive and accessible financial services,” he said.

If it were not for the introduction of mobile money services by MNOs and later on partnerships between the MNOs and the country’s banks, more than a third of Malawi’s population would have been excluded from safer and reliable means of financial transactions.

Economist from the Malawi University of Business and Applied Sciences Betchani Tcehereni believes that, as much the partnerships are important, there is a need to make the transactions reliable and affordable to everyone.

“Transferring money from the bank to a mobile money wallet costs money that some people in the villages would not want to part ways with, which can also drive them away from using the system. Therefore banks and MNOs should make these transactions more affordable,” Tchereni said.

The financial inclusion drive as being championed by the Reserve Bank of Malawi is a great tool for empowerment and economic growth at both micro and macro level.

Partnerships to foster this agenda have never been more important than now and financial institutions, including those in the insurance, pension and stock market sectors, among others, need to find their way into these partnerships.

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