Financial institutions in the country have been urged to increase their contributions toward the agriculture sector to help in the development of the national economy.
The call was made by Global Communities Country Manager, Nobel Moyo, in Blantyre on Friday during a half day workshop organised to engage managers in financial institutions to provide more funding towards agribusiness.
Global Communities works in areas of economic development; micro, enterprises among others.
Moyo noted that financial institutions are always afraid to invest in small holder farmers who have the potential of turn the country’s struggling economy around.
“Malawi’s economy depends on agriculture which provides about 30 percent to the country’s GDP, but statistics indicate that financial institutions only provide about five percent towards agriculture development, so we are saying we need to improve that, there are farmers that are looking for loans and banks should be able to provide.
“We are also highlighting to the bank managers ways they can avoid risks that might arise when they start putting in more resources towards agriculture,” said Moyo.
One of the facilitators of the workshop, Maarten Susan, from the Financial Access Commerce and Trade Services in Nairobi, Kenya said, as the biggest sector in the economy, agriculture needs more funding from financial institutions.
“Agriculture is the biggest sector in Africa. It has to be provided with a lot of funds, but what do we see, banks are reluctant to provide such funds.
“However, this is the only sector that can improve African economies and Malawi’s in particular so banks should end their reluctance and provide small scale farmers with finances for their farming,” said Susan.
Head of Consumer and Commercial Banking a t Ecobank, Victoria Chanza, described the workshop as an eye opener and expressed hopes that financial institutions will now be able to finance agriculture.
Among other risks that banks and other financial institutions are threatened according to Chanza with are issues of climate change that have a negative impact on agriculture productivity.